{"id":33395,"date":"2024-06-20T13:20:16","date_gmt":"2024-06-20T05:20:16","guid":{"rendered":"https:\/\/umedic.com.my\/Stagging2025\/?p=33395"},"modified":"2024-06-20T13:20:16","modified_gmt":"2024-06-20T05:20:16","slug":"umedic-to-double-production-capacity-of-hydrox","status":"publish","type":"post","link":"https:\/\/umedic.com.my\/Stagging2025\/umedic-to-double-production-capacity-of-hydrox\/","title":{"rendered":"UMediC to double production capacity of HydroX"},"content":{"rendered":"
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PETALING JAYA: Medical consumables maker UMediC Group Bhd<\/a><\/a> plans to nearly double its targeted production capacity of HydroX prefilled humidifiers, considering the robust demand for the product.<\/p>\n

Post-meeting with the management, Hong Leong Investment Bank (HLIB) Research said UMediC\u2019s newly guided plan is to increase the installed capacity of HydroX to 1.1 million bottles per month by the first quarter of 2025.<\/p>\n

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The previous target was 600,000 bottles per month by end-2024.<\/p>\n

In fact, the 600,000 bottles target was already in addition to the 40% increase in installed capacity earlier in April this year, when the capacity rose from 300,000 bottles to 420,000 bottles per month.<\/p>\n

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HydroX prefilled humidifier is used to humidify the respiratory gas for patients and mostly used in oxygen therapy such as oxygen concentrators, gas cylinder or wall gas outlets via a mask or cannula in homecare, hospital, extended care facilities or hospital environment.<\/p>\n

\u201cCurrently, UMediC is operating at 80% to 90% HydroX capacity, despite its recent 40% increase in capacity.<\/p>\n

\u201cConsidering the robust demand, we believe that plant utilisation rate will be favourable to support its ambitious capacity expansion plan,\u201d stated HLIB Research.<\/p>\n

On UMediC\u2019s marketing and distribution segment, HLIB Research expects meaningful order replenishment to happen in the first quarter of financial year 2025 (1Q25).<\/p>\n

This is considering that the public tender for medical equipment has been slow as the Health Ministry (MoH) is finalising the structure to fully shift from an asset ownership model to a leasing model for medical equipment.<\/p>\n

This could be part of the cost savings measures by the government.<\/p>\n

\u201cThis sends three messages: First, we will not see a material rebound in orders in 4Q24 as MoH is still finalising the new procurement model. Nonetheless, we forecast a meaningful replenishment to happen in 1Q25.<\/p>\n

\u201cSecond, upon finalisation, the revenue per equipment delivered will be lower \u2013 nevertheless, we believe this could potentially be offset by higher volume purchased (lower initial cash outlay for each equipment) coupled with winning over market share from its smaller peers, differentiated by its strong financial profile.<\/p>\n

\u201cThird, margin compression as a consequence of the government\u2019s cost-savings measures. Nevertheless, we have imputed conservative pre-tax profit margins of 14.5% to 16% in the financial years of 2024 to 2026 (FY24 to FY26) post-results review.\u201d<\/p>\n

Looking ahead, HLIB Research has trimmed FY24 forecasts by 3% in response to unfavourable operating leverage effect following a soft recovery in the marketing and distribution segment in 4Q24.<\/p>\n

\u201cWe maintain FY25 forecast but increase FY26 by 28% to primarily reflect the higher capacity expansion of HydroX to 1.1 million bottles per month by 1Q25,\u201d it added.<\/p>\n

HLIB Research has maintained its \u201cbuy\u201d call on UMediC with a higher target price of RM1.02 per share.<\/p>\n

\u201cOur optimism towards UMediC remains intact, mainly fuelled by its robust capacity expansion in the manufacturing segment.\u201d<\/p>\n

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\u2013 The Star  \u2013<\/p>\n<\/div>\n<\/div>\n

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www.thestar.com.my<\/a><\/div>\n<\/div>\n

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  PETALING JAYA: Medical consumables maker UMediC Group Bhd plans to nearly double its targeted production capacity of HydroX prefilled humidifiers, considering the robust demand for the product. Post-meeting with the management, Hong Leong Investment Bank (HLIB) Research said UMediC\u2019s newly guided plan is to increase the installed capacity of HydroX to 1.1 million bottles per month […]<\/p>\n","protected":false},"author":129,"featured_media":31692,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"

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UMediC Group Berhad (KLSE:UMC<\/a>) Second Quarter 2023 Results<\/h2>\r\n

Key Financial Results<\/h3>\r\n