KUALA LUMPUR: UMediC Group Bhd (UMC) is expected to achieve core profit after taxation and minority interests (PATMI) growth of about 25 per cent in the financial year 2025 (FY25), driven by an increase in production capacity for HydroX.
Hong Leong Investment Bank Bhd (HLIB Research) said since April 2024, production has risen by 40 per cent to 420,000 bottles of 450 millilitres (ml) per month, up from 300,000 bottles previously.
This capacity will further expand to 600,000 bottles per month by December 2024, a 43 per cent increase, and reach 1.1 million bottles per month, an 83 per cent rise, by the first quarter of the calendar year 2025 (1QCY25).
"For the marketing and distribution segment, we expect a more meaningful order replenishment to happen in 1QFY25.
"Separately, its pivot towards healthcare services, via the UMC Care Centre, also underscores its diversification strategy," it said in a note.
HLIB Research has maintained a "Buy" call on UMC, with a slightly higher target price of RM1.04.
The firm said its optimism towards the company remains intact, mainly fuelled by its robust capacity expansion in the manufacturing segment.
Meanwhile, HLIB Research also said that UMC's 4QFY24 core PATMI came in above its (109 per cent), but within the street's (102 per cent) expectations.
UMC's 4QFY24 core PATMI came in at RM3 million, bringing FY24's sum to RM9.7 million.
"The positive deviation was mainly due to better-than-expected PBT margins in both distribution and manufacturing segments, in contrast to our conservative estimates.
"FY24 core PATMI was arrived at after adding back one-offs (mainly professional fees in relation to its special issue and Main Market transfer) amounting to RM800,000," it noted.
Overall, HLIB Research has raised its FY25 and FY26 forecasts marginally by three per cent and two per cent respectively, to reflect higher profit before tax (PBT) margin assumptions for the both segments.