PETALING JAYA: Rising plastic input costs may weigh on UMediC Group Bhd
’s (UMC) near-term outlook, but analysts expect its earnings to strengthen in financial year 2027 (FY27), led by the distribution division.
Hong Leong Investment Bank (HLIB) Research believes continued uncertainty over plastic input costs, amid the recent re-escalation of the US-Iran war, limits the company’s near-term upside.
It cautioned that UMC’s manufacturing segment will be clouded by elevated Brent prices from US$95 to US$100 a barrel towards the first half of FY27.
This would hence raise pressure on plastic input costs.
“UMC’s core net profit for the financial year-to-date had declined 4.5%, mainly due to weaker profitability in the manufacturing division, where gross profit margin contracted to 6% versus 23% previously.
“This was likely attributable to unfavourable foreign exchange movements in the second quarter of FY26 and higher plastic input costs from third quarter of FY26 onwards,” it added.
However, stronger demand for respiratory-related products and higher selling prices to offset elevated plastic input costs drove a sharp quarter-on-quarter increase in UMC’s manufacturing revenue, according to the research house.
Meanwhile, MBSB Research said UMC is reinforcing its manufacturing foundation by acquiring three acres of industrial land, expanding cleanroom capacity, and adopting advanced automation to meet rising domestic and global demand across its product portfolio.
Philip Capital Research pointed out that UMC’s Plant 3 is targeted for completion by 2029 and is expected to provide long-term capacity headroom to support the group’s next growth phase.
