MBSB Research has maintained its BUY call on UMedic Group Bhd (UMC) and raised its target price to 43 sen from 42 sen, after the medical device and healthcare solutions group’s FY2026 results came broadly in line with expectations.
UMC’s FY2026 normalised earnings met 97% of MBSB’s forecast and 98% of consensus estimates.
Revenue rose 21% year-on-year to RM58.7 million, driven mainly by stronger performance from the marketing and distribution segment, where revenue increased 34% to RM44 million.
Core earnings, however, declined 6% to RM7.9 million, partly due to higher consolidated eliminations of RM3.6 million compared with RM2.2 million in FY2025.
Despite the softer full-year profit, MBSB noted that both operating segments recorded stronger pre-tax profit. Manufacturing profit before tax rose 28% to RM4.7 million, while the marketing and distribution segment saw an 80% increase to RM9 million.
UMC’s fourth-quarter core earnings also improved to RM2.3 million, up 26% quarter-on-quarter.
Looking ahead, MBSB said UMC is positioned to benefit from stronger healthcare demand, supported by government spending and longer-term demographic trends.
The research house pointed to the RM47 billion allocation under Budget 2026 and the RM40 billion healthcare commitment under the 13th Malaysia Plan through 2030 as supportive factors.
It also expects healthcare to remain a policy priority under Budget 2027.
MBSB said UMC could benefit from structural drivers including hospital overcrowding, medical tourism and Malaysia’s ageing population, which it said is projected to reach 21% by 2044.
The group is also expected to expand into ambulatory care, grow its ambulance fleet, scale integrated learning and community health centres, and diversify into laboratory services and specialised healthcare verticals through its Akiteck and Ateria subsidiaries.
On the manufacturing side, UMC is strengthening capacity through the acquisition of three acres of industrial land, expansion of cleanroom facilities and greater automation.
MBSB raised its FY2027 and FY2028 earnings forecasts by 2% after incorporating the latest results.
Its revised 43 sen target price is based on a 16.5 times price-earnings multiple applied to revised FY2027 earnings per share of 2.6 sen.
The research house said it continues to favour UMC for its stable distribution business, higher-margin proprietary manufacturing operations and exposure to government healthcare spending, medical tourism and long-term growth in care demand.
