PPE supplier Medtecs' share price swings to end lower

Singapore

MEDICAL products supplier Medtecs International's stellar third-quarter results - boosted by explosive demand for personal protective equipment (PPE) - gave its shares an upbeat morning on Wednesday, but the stock's gains were rapidly lost in the late afternoon.

Amid heavy volumes changing hands, the Catalist-listed stock climbed as much as 7.4 per cent or S$0.11 to hit an intra-day high of S$1.59 at around 11.45am.

However, it sank to a low of S$1.34 about 20 minutes before the closing bell. The counter finished the day at S$1.36, down S$0.12 or 8.1 per cent from Tuesday's close.

Some 75.6 million shares were traded, making Medtecs the most active counter by value on the Singapore bourse and the third most actively traded by volume.

Close to 160 large trades - each with a value of more than S$150,000 - were recorded during the day, based on Shareinvestor data.

Despite the share price drop on Wednesday, shares of Medtecs are still up by more than 3,570 per cent so far this year, from S$0.037 at the end of last year. The counter had rallied following the onset of the Covid-19 outbreak, as investors piled into the pandemic beneficiary.

Medtecs reported on Tuesday evening that its revenue had jumped to US$124.6 million for the three months ended September, increasing by 636 per cent from a year ago.

Net profit surged by 1,115 times to US$45.7 million for the quarter.

The coronavirus pandemic has triggered a swell in global demand for PPE. The company said it expects this demand to remain strong, given that the prospect of a safe and effective Covid-19 vaccine is still uncertain.

This year, amid the Covid-19 outbreak, Medtecs provided one-stop, bundled services to meet customers' demand for head-to-toe protection by supplementing its existing products with those from third-party vendors.

It also used e-commerce platforms and data analysis to source for potential customers and new vendors.

In addition, Medtecs developed its own "CoverU" line of PPE. Sales of products carrying its own label in the first nine months of 2020 made up more than 68 per cent of the group's total sales, Medtecs noted on Tuesday.

"With long-term indicative orders in hand and stabilising raw material prices, the company expects to report record revenue and profit in the fourth quarter and financial year ending Dec 31, 2020," it added.