BIMB Research said Supercomnet has a high customer concentration, with over 70% of revenue derived from its top clients.
PETALING JAYA: BIMB Research is positive on Supercomnet Technologies Bhd
as it is a niche Malaysian original design manufacturer that is well-positioned to benefit from the growing demand for outsourced medical manufacturing.
“Its long-standing relationships with Tier-1 clients such as Ambu, Edwards Lifesciences and Boston Scientific highlight high entry barriers and strong customer stickiness, supported by 12 to 18-month qualification cycles.
“Backed by a net cash position of RM230mil, the company is well-equipped to self-fund future growth opportunities,” the research house said.
It added that the group also offers margin expansion potential and a credible path to doubling earnings over the next two to three years.
A direct beneficiary of the post-Covid-19 outsourcing wave in medical technology, Supercomnet is a specialised, US Food and Drug Administration (FDA) compliant and cost-efficient manufacturer.
Supercomnet has a high customer concentration, with over 70% of revenue derived from its top clients, the research house noted.
While this is a risk, BIMB Research said it is a common characteristic in the medtech outsourcing industry due to long qualification cycles and specialised requirements.
The research house said execution delays such as cleanroom readiness or FDA approvals could impact revenue timing and margins.
Additionally, with 90% of sales denominated in US dollars, earnings are exposed to currency volatility, although this is partially mitigated by a natural hedge through US dollar-based procurement, the research house said.
Key catalysts include the launch of new high-margin medical products such as electroencephalogram cables, smart infusion systems and entry into advanced medical devices, which support earnings growth and deepen Supercomnet’s value chain positioning.
“Potential new customer wins may further enhance revenue visibility,” the research house said.
