Medtecs International: Post Result Announcement

Medtecs International Corporation Limited has released its FY2020 results on 1 March 2021. In this article, we will be looking at the highlights of their result announcement and the management outlook for the group.

About Medtecs International Corporation Limited

Medtecs International Corporation Limited (“Medtecs”) is the world's leading supplier of personal protective equipment (“PPE”) and a multi-national PPE stockpiling solutions provider to governments and group purchasing organizations around the world.

The Group commenced operations in the Philippines in 1989 and has since established a strong presence in the United States, Europe, and Asia Pacific. Medtecs currently is headquartered in Taipei, Taiwan.

Medtecs has offices and facilities strategically located in Taiwan, Cambodia, the Philippines, Singapore and China. In 2020, the Group incorporated Medtecs USA Corporation, the first subsidiary in the United States, for expansion into the local PPE and medical consumables market.

FY2020 Result Highlights

For FY2020, Medtecs’ revenue increased significantly by 480.4% year-on-year to US$400.3 million due to the global surge in demand for Personal Protective Equipment (“PPE”) arising from the COVID-19 pandemic.

As a result, net profit increased significantly by 11,196.4% to US$131.7 million in FY2020 from US$1.2 million in FY2019 on the back of better economies of scale and higher selling prices.

Breakdown in Revenue Segment

Revenue from the Original Product Manufacturing (“OPM”) division increased significantly by 576.4% year-on-year to US$357.8 million in FY2020 from US$52.9 million in FY2019 due to unsatiable demand for PPE as well as increase in sales from existing customers.

Revenues from Hospital Services division marginally improved by 2.8% year-on-year to US$14.7 million in FY2020 from US$14.3 million in FY2019, which was attributable to higher linen consumption in Taiwan and Philippines.

Revenues from Trading, Distribution and others skyrocketed 1,444.2% from US$1.8 million in FY2019 to US$27.8 million in FY2020 due to higher customer demand on healthcare items.

Dividend

In conjunction with the FY2020 result announcement, Medtecs’ Board of Directors has recommended a final dividend of US$0.0418 per ordinary share. Coupled with the interim dividend of US$ 0.0085 per ordinary share, the total dividend per ordinary share stood at US$0.0503.

Based on the current share price of S$0.955, the indicative yield for Medtecs’ share stands at an attractive 7.01%.

Management Outlook

Looking ahead to 2021, Medtecs’ management has highlighted the Company will leverage on the post-COVID 19 change in the overall awareness of the importance of PPE and best practices for future pandemic planning to broaden product offering and expand its market share.

Concurrently, the Group will make full use of e-commerce platforms through the business model of “Source and Sell Globally”, which will drive customer engagement and help the Group source for quality raw materials as well as diversify the pool of trusted PPE suppliers to minimize the impact of supply chain disruption.

Furthermore, the Group will continue to promote organic growth by building awareness for its own brand, develop new products, and expand sales channels to gradually decrease the Group’s reliance on OPM revenues.

In addition, the Group will continue to build strategic partnerships and seek joint venture and/or acquisition opportunities to enhance competitiveness and sustain the growth of the Group.

Finally, barring unforeseen circumstances, the Group is expected to remain profitable for FY2021.

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