WHILE investors are still grappling whether to continue riding the glove mania or move on to potential coronavirus (Covid-19) vaccine plays, one company namely MSCM Holdings Bhd is venturing into both.
Fresh from announcing its venture into nitrile glove manufacturing, MSCM has crafted a plan to get involved in distributing vaccines and test kits related to Covid-19.
In a filing with Bursa Malaysia this week, MSCM proposed a plan to raise cash of around RM123mil via a private placement of its shares for this purpose. The venture into the supply of vaccines and test-kits will be undertaken by its 51%-owned subsidiary HS Bio Supplies Sdn Bhd, the filing revealed.
The remaining 49% stake in HS Bio is owned by MMAG Holdings Bhd. It is worth noting that MMAG held a controlling stake in MSCM until recently.
According to the filing, HS Bio intends to source the medical and healthcare products from exclusive distributors approved by the Health Ministry (MoH). These products include vaccines, test kits, medicine and supplements.
“In view of the recent pandemic, the proceeds from the proposed private placement will enable the group to have ready funding for HS Bio to source for the much-in-demand medical products such as the Covid-19 test kits, supplements and vaccines upon availability and approval from the MoH, ” MSCM said.
MSCM is also targeting to deploy its own mobile testing facilities for communicable diseases and viruses such as influenza, hepatitis and Covid-19.
MSCM’s strategy for this move can be seen from an exercise it carried out last month. That was when HS Bio acquired a 20% stake in eMedAsia for RM2mil. The deal will see it becoming eMedAsia’s exclusive fourth party logistic service provider to give warehousing services to all eMedAsia’s member clinics and hospitals.eMedAsia is a digital platform started by Kooperasi Persatuan Perubatan Malaysia (KOOP MMA) to enable private clinics to procure medicine, provide telemedicine services and access other healthcare-related services.
KOOP MMA, which is an investment vehicle of the Malaysian Medical Association (MMA), holds the lion share in eMedAsia with a 48% stake, followed by Open Dynamics Sdn Bhd (32%) and HS Bio (20%).
Notably, eMedAsia has on board almost 2,000 registered private clinics out of the total 6,000 in the nation.
The role that MSCM is looking to play is different from that of Pharmaniaga Bhd and Duopharma Biotech Bhd. The latter two pharma giants will be undertaking the “fill and finish” process for the vaccine, which entails the process of filling vials with vaccine and finishing the process of packaging the medicine for distribution.
MSCM is looking to play a role as a key distributor of potential Covid-19 vaccines. It is not without competition though – another listed company gunning for the wholesaling and distribution of vaccines is Apex Healthcare Bhd.
For MSCM, the group is backed by Penang-based Hong Seng Group led by one Datuk Teoh Hai Hin and his brothers.
The Hong Seng Group is a reputable logistics player with half a century of experience in lorry-related businesses and is seeking to expand its vehicle leasing operations. Apart from the lorry business, the Hong Seng group is also involved in asset management, property and construction development.
In an earlier interview with StarBiz, Teoh had said that the entry of Hong Seng Group into MSCM is to transform the latter into a formidable logistics player in South-East Asia.
MSCM, previously known as PanPages Bhd, is in the midst of changing its name into Hong Seng Consolidated Bhd.
The Hong Seng group emerged in MSCM last month after it bought close to a 30% stake from MMAG for RM18.09mil cash, which saw the latter exit the company.
For the longest time, MSCM’s share price has been flat and unexciting but that changed in mid-July. Its share price has soared from 14 sen then to RM1.76 in late August.
Yesterday, the counter closed at RM1 per share.
Following Hong Seng Group’s entry, Teoh was appointed executive chairman of MSCM, while his daughter was appointed to the board of directors.
Right after the emergence of Hong Seng Group in MSCM, the latter announced its foray into the glove sector.
Last month, Hong Seng Gloves Sdn Bhd entered into a turnkey commissioning glove production line agreement with Howellcare Industries Sdn Bhd for RM59.4mil cash.
The first glove is expected to be produced by April next year with a capacity of 1.45 billion pieces per annum.
MSCM said the agreement was a timely opportunity for the group to venture into manufacturing and trading in gloves as it expected the trend would last a couple of years due to the new norm of sanitising and maintaining good hygiene.
While it is hard to engage how successful MSCM will be in its plans for glove manufacturing and the distribution of potential Covid-19 vaccines, the emergence of the Hong Seng Group in MSCM certainly makes the company an interesting one to watch.