PETALING JAYA: UMediC Group Bhd
’s outlook in the near term is expected to be impacted, among others, by the ringgit’s strength against the US dollar.
Hong Leong Investment Bank Research (HLIB Research) said going forward, it believes the sales volume of respiratory products within the group’s manufacturing division would be supported by global healthcare megatrends, particularly the growing ageing population.
That said, it noted this positive outlook would be impacted by the ringgit’s strength against the US dollar.
HLIB Research anticipates limited room for average selling price adjustments (in US dollar terms) to pass on this strengthening, given a relatively stable US dollar against the Chinese yuan trend, the key currency benchmark of regional peers.
It added a potential re-rating catalyst for UMediC’s distribution segment in financial year 2026 (FY26) would be the successful outcome from the recent RM444mil Health Ministry’s ambulance tender.
UMediC reported first quarter financial year 2026 core net profit of RM1.6mil, coming in below both HLIB Research’s (16%) and consensus (17%) full-year estimates.
The shortfall stemmed primarily from the weaker-than-expected revenue from the manufacturing division, as well as lower-than-expected pre-tax profit margins across both the manufacturing and distribution divisions, amid recent ringgit strength headwinds against the manufacturing division in upcoming quarters.
Given the results shortfall and the ringgit’s strength, HLIB Research cut its FY26 to FY27 forecasts on UMediC by 14.4% and 13.1%, reflecting lower revenue assumptions for the manufacturing division and weaker pre-tax margin assumptions across both divisions.
It reiterated its “hold” rating on UMediC with a lower target price (TP) of 35 sen per share.
Phillip Capital Research, however, is maintaining its “buy” rating with a higher TP of 51 sen a share.
It continues to like the group for its manufacturing segment growth trajectory on capacity doubling and robust global demand, and a healthy pipeline of new products broadening the revenue stream.
It said UMediC’s current valuation appears undemanding, with the stock trading at minus two standard deviations near its three-year mean.
Downside risks to its call include a potential slowdown in demand for medical equipment, operational disruptions, and licence losses.
