4 Best Performing Medical Supply Stocks On SGX [13 Nov 2020] Medtecs (SGX: 546); UG Healthcare (SGX: 8K7); Top Glove (SGX: BVA); Riverstone (SGX: AP4)
It should come as no surprise to any investors that medical supply stocks (along with technology) are among the best-performing stocks on the financial markets in 2020.
As reported in an SGX Market Update on 5 November 2020, 36 out of the 100 most traded stocks this year on the SGX have generated positive returns. Among these 36 stocks, 22 of them have businesses that are related to medical and protective equipment, digitalisation, or work-from-home related electronics.
In this week’s edition of 4 Stocks This Week, we look at some of the best performing medical supply stocks on the SGX in 2020 thus far.
Medtecs International (SGX: 546)
Medtecs is a product manufacturer of a wide range of medical consumables as well as personal protective equipment, hospital wear, and workwear apparels. It has established a strong presence in the US, Europe and Asia Pacific. Due to the COVID-19 pandemic, its products and services have no doubt become essential as countries around the world continue to cope with the outbreak.
Since the start of the year, Medtecs share price has climbed about 22 times from 0.04 to 0.885 (as of 13 Nov). This isn’t without good reason. Medtecs reported net profits of US$83.4 million for the first three quarter of 2020, which is a phenomenon return when you consider that the company’s net profit for FY2019 was US$1.2 million. Net profit margin for the company has also soared from 1.7% in FY2019 to 29.5% thus far for the first 9 months of 2020.
Medtecs is currently the best performing company on the SGX in 2020.
UG Healthcare (SGX: 8K7)
UG Healthcare is predominantly a rubber glove manufacturer that is based in Malaysia. Similar to Medtecs, it’s not difficult to imagine why UG Healthcare is likely doing very well in 2020 as the global demand for gloves of all kinds has been at a supernormal level. This may continue for quite a few years even after a COVID-19 vaccine is discovered.
At the start of the year, UG Healthcare share price was at 0.05. As of 13 November 2020, share price is at 0.76, which is about 15 times higher.
For FY2020 (which ends on 30 June 2020 for the company), UG Healthcare reported a net profit of S$13.4 million, which is more than 5 times higher compared to its net profit of S$2.5 million in FY2019.
However, more impressively, the company released on 5 November 2020 its results for 1Q2021. The company saw a revenue of S$71 million for the quarter (1 July 2020 to 30 September 2020) as compared to S$26 million for the same period a year before. Its net profit for the quarter was S$22.6 million, which is already higher than the net profit for the whole of FY2020. Its net profit margin is at 31.9% compared to 1.2% in the same period last year.
Top Glove (SGX: BVA)
Another rubber glove company based in Malaysia, Top Glove is the world’s largest manufacturer of gloves with 26% of the world’s market share for rubber gloves. Apart from gloves, it has a comprehensive product range including condoms, face masks, dental dams and exercise bands for both healthcare and non-healthcare industries.
In September 2020, Top Glove did a share split when it gave 2 bonus shares for every share held by investors. Based on its share split price, the company share price has increased from 0.51 at the start of the year to 2.53 as of 13 November 2020, an increase of almost 5 times.
Riverstone Holdings (SGX: AP4)
Riverstone is a leading manufacturer of cleanroom and medical industry consumables, including healthcare gloves, nitrile gloves, finger cots, face masks, packaging materials, and other consumables.
Similar to Top Glove, Riverstone recently did a share split of 1 bonus share for every share held by investors. Based on its share split price, the company share price has increased from 0.47 at the start of the year to 1.52 as of 13 November, a return of about 3 times.
Riverstone recently announced its results for 3Q2020. As compared to 3Q2019, the company net profit increased by about 400% from RM 35.6 million to RM 178.6 million.
It’s worth noting that all of the 4 stocks mentioned above saw its share price decline over the past week when news broke earlier this week that a COVID-19 vaccine might be ready soon. As such, investors in these companies should tread carefully as any news of a COVID-19 vaccine (which we hope will come sooner rather than later), could affect the share prices of these companies.