KUALA LUMPUR (April 4): Shares of UMediC Group Bhd surged on Thursday after the medical device company secured approval for a proposed listing transfer to the Main Market of Bursa Malaysia.

UMediC rose as much as 5.6% to 66 sen, its biggest gain in a single day since Aug 11, 2023. The stock was trading at 64 sen, up by 2.4% or 1.5 sen, at 10.15am after 844,600 shares changed hands. In contrast, the country’s benchmark index FBM KLCI was 0.4% higher.

A listing transfer to the Main Market typically entails access to a bigger pool of investors, including foreign and institutional investors which may not have the mandate to invest in second board ACE Market.

Further, a Main Market listing is also required to have an uninterrupted profit after tax for three to five full financial years with an aggregate of RM20 million minimum, as well as at least RM6 million in profit after tax in the latest full financial year.

Shares of UMediC have declined 9.22% so far this year as earnings fell with escalating expenses that outstripped revenue growth. Still, analysts are widely bullish on the stock as they bet on earnings improvement from its new factory and product launches.  

All four analysts covering UMediC rated the stock "buy", according to Bloomberg. The consensus’ 12-month target price is RM1, a potential gain of over 56% from the current price.

On Wednesday, UMediC announced that the Securities Commission Malaysia (SC) has approved the proposed transfer and resultant equity structure.

The medical equipment supplier was listed on the ACE Market on July 26, 2022 and has doubled its share price since then.

For the first half ended Jan 31, 2024, UMediC’s net profit declined 11.02% to RM4.37 million from RM4.91 million, primarily due to higher administrative and marketing expenses.

Revenue rose 17.5% to RM28 million from RM23.83 million, driven by demand for medical devices and consumables from both public and private hospitals, as well as healthcare service providers.

UMediC is controlled by Datuk Ng Chai Eng and Datuk Lau Chee Kheong, who are also the co-founders of listed sheet metal fabrication company UWC Bhd. Ng, his nephew Eric Lim and Lau have 51.44% control in UMediC through UMediC Capital Sdn Bhd.

Each also directly owns a 5% equity interest in the medical device specialist.

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UMediC gets SC’s nod for proposed Main Market transfer