Kenanga Research forecasts organic growth for Scomnet’s medical segment to be in the low double-digit range.
PETALING JAYA: Supercomnet Technologies Bhd
’s (Scomnet) upcoming new product launches and rising demand for medical devices will likely help it record a stellar performance in financial year 2026 (FY26).
Kenanga Research, in an initiation research report, said Scomnet’s new suite of products, such as transcatheter heart valves aims to tap into existing clients who have significant market shares abroad.
It forecasts organic growth for Scomnet’s medical segment to be in the low double-digit range with earnings expected to be contributed by the launch of certain key products in the first half of FY26.
Major examples include the soft launch of artificial intelligence smart cables for existing Customer, the magnetoencephalogram cable for Customer A and the syringe infusion system for Customer I.
“We expect the medical segment to be the main earnings growth driver in FY26 and FY27 and forecast a net profit growth of 18% for each year,” the research house noted.
Additionally, Scomnet’s medical segment was the biggest revenue contributor in FY24 at 80% of total revenue or at RM119.6mil while its industrial segment contributed RM26.4mil.
It added Scomnet, in a bid to protect itself from pricing pressures and stay competitive, continues to shift to higher-margin medical products where the barriers to entry are high, unlike the industrial segment.
Additionally, the group had been big in the industrial wires and cable segment with major Japanese customers including companies such as Sony, Yamaha and Matsushita (Panasonic).
Scomnet also has a proven track record premised on long-term strategic partnerships of 15 to 20 years with Tier-1 healthcare partners such as New York Stock Exchange-listed Edwards Lifesciences Corp and Danish medical device company Ambu A/S.
Kenanga Research has an “outperform” call on Scomnet with a target price of RM1 a share.
The stock was last traded at 72.5 sen at market close yesterday.
Furthermore, the valuation is based on 20 times FY27 earnings per share and a 30% discount to the proxy peers’ average of 32 times.
The research house likes Scomnet for the bright prospects of disposable endoscopes, its solid business model from product conceptualisation, design and manufacturing of original equipment manufacturer tubing cable assemblies and devices (which will allow it to keep most of the margins for the group) and the superior margins of its business model.
