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A 5,000% surge makes Medtecs Singapore's top stock
[SINGAPORE] Shares of Medtecs International, a maker of medical apparel, traded for just a few Singapore cents at the start of the year before the pandemic roiled financial markets. Now they're up almost 5,000 per cent.
Supernormal demand for essential reusable hospital garb, disposable personal protective equipment and workwear helped the Taipei-headquartered company's net income grow about 100 times in the six months ended June 30 from the previous year. The stock is the top performer for Singapore and among the best in the global health-care supply sector for 2020.
"Profit for the second half will be better than the first half with current orders in hand," Medtecs chief executive officer William Yang said, adding that his firm is helping the Philippines build protective equipment inventory and is in talks to also supply institutional agencies in the US and Europe.
Medtecs's surge illustrates how the pandemic has made medical-related stocks some of Asia's top performers. Singapore's disposable glove maker UG Healthcare has soared 1,798 per cent this year, while Malaysia's Top Glove has jumped 477 per cent to become the biggest gainer in the MSCI Asia Pacific Index.
Shares in Medtecs gained S$0.02 or 1.1 per cent to S$1.87 as at 4.22pm in Singapore on Thursday.
Despite the impressive surge in healthcare stocks, investors should assess the pace of infections and the likelihood of a vaccine before buying, said Justin Tang, the head of Asian research at United First Partners in Singapore.
"Investors need to be careful because when we get the vaccine there will be a surplus of things like masks, gloves and other medical wear," Mr Tang said.
Mr Tang advice may be worth heeding, especially as hopes for a treatment grow. Last week, Russia announced the world's first Covid-19 vaccine amid international skepticism, while Moderna reached a deal with the Trump administration to supply its experimental vaccine to the US.
Prospects for a cure may already be taking some of the steam out of the health sector's eye-popping rallies. Shares in world's biggest glove makers such as Top Glove, Hartalega Holdings and Supermax have dropped from their all-time highs reached earlier this month.
"There is no way that healthcare companies will be able to sustain the Covid-19 led demand," Mr Tang said. "When vaccine comes, it will be over."