The counter traded at 50 sen at the opening bell, up from its IPO price of 32 sen. That also made it the top gainer and the most actively traded counter in the morning session, with 11.14 million shares changing hands.
Executive director and chief executive officer Lim Taw Seong said the company’s shares were oversubscribed 46.81 times.
He said the company had transformed from offering dental-related products to medical devices and consumables in its marketing and distribution segment.
In addition, he said, UMC had ventured into the manufacturing segment and would continue to grow its footprint by introducing new products into the market and remains optimistic in light of growing interest in quality healthcare.
UMC has successfully raised RM31.1 million via the issuance of 97.22 million new shares of which 11.3% of the proceeds have been earmarked for the construction of a new factory building, 21.9% for the setting up of new marketing and distribution offices, 28.9% for the repayment of bank borrowings, 27.8% for working capital and the remaining 10.1% for listing expenses.
Meanwhile, Hong Leong Investment Bank (HLIB) Research has recommended a “buy” call with a target price (TP) of 61 sen, in line with the peer average which consists of both local and international medical device manufacturers and distributors.
The HLIB report acknowledged that UMC’s market capitalisation is considerably smaller than envisaged, but deemed the valuation justifiable given that it would be compensated by expectations of stronger earnings growth.
HLIB Research said that as a beneficiary of the pandemic, UMC saw its core earnings grow at a compound annual growth rate (CAGR) of 103% from financial year 2019 to financial year 2021 due to a boost in demand for medical devices and consumables.
Going forward, HLIB Research is projecting the company’s financial years 2022, 2023 and 2024 earnings to grow by 31.7%, 41.0% and 18.1 % respectively; far exceeding the 12.1% CAGR projected by Protégé for the local medical device industry.