MBSB Investment Bank Bhd (MBSB Research) has initiated coverage on UMediC Group Bhd with a BUY recommendation and a target price of RM0.42 per share, representing a potential 40% upside.
The research house said UMediC’s integrated medical device model, expansion of automated manufacturing capacity and growing global export footprint could support a structural growth inflection for the company.
MBSB highlighted that UMediC’s dual-engine business model, comprising proprietary manufacturing and medical equipment distribution, provides a strong foundation for earnings growth. The research house noted that the company’s manufacturing arm exports more than 90% of its output to around 40 countries, while its distribution segment supplies advanced healthcare equipment to public and private hospitals in Malaysia.
The research house said UMediC’s newly expanded Batu Kawan facility is expected to be a key growth driver, increasing production capacity for its HydroX prefilled humidifiers and other medical consumables. The expansion will raise production capacity to about 1 million bottles per month by the second half of calendar year 2026, supported by additional production lines, mould cavities and advanced cleanroom facilities.
MBSB Research added that UMediC’s long-term growth prospects are supported by its RM11.4 million lease agreement with Penang Development Corporation for a new 3-acre industrial site in Batu Kawan Industrial Park. The facility, targeted for completion in 2027, is expected to further support automated manufacturing and future export demand.
The research house said UMediC’s recent move into higher-value medical technologies, including the rollout of Malaysia’s first PINS Vagus Nerve Stimulation system, could strengthen its position in specialised healthcare solutions.
However, MBSB Research highlighted risks including foreign exchange volatility, rising medical-grade plastic polymer costs and potential margin pressure within its manufacturing segment.
The research house expects UMediC’s revenue to reach RM52.6 million in financial year 2026, RM53.4 million in 2027 and RM54.3 million in 2028, with core profit attributable to shareholders projected at RM8.2 million, RM9.5 million and RM10.1 million respectively.
As of 10.36 am, the stock price slips 1.67% to RM0.295.
