Supercomnet Technologies Bhd (SCOMNET, 0001) hits record high as orders from medical device makers soar
KUALA LUMPUR (June 17): Shares in Supercomnet Technologies Bhd, which specialises in making wires and cables for medical devices, soared to a record high of RM1.33 in the morning session today.
At the noon break, the stock had surged 26.2% or 27 sen to RM1.30. Its trading volume swelled to 38.07 million shares, substantially higher than its 200-day average trading volume of 1.95 million shares.
The Edge Malaysia weekly previously reported that Supercomnet’s wholly-owned subsidiary Supercomal Medical Products Sdn Bhd (SMP), which manufactures cables used to connect various medical devices, had seen its order volume double since the Covid-19 pandemic outbreak began.
“Demand for medical cables has always been strong, but recent orders from our clients indicate that demand is picking up even further,” said Supercomnet managing director James Shiue Jong-Zone in an interview with The Edge.
The main products developed by the company include disposable medical consumables for Class 1, Class 2 and intensive care unit (ICU) usage.
Supercomnet’s main customers comprise New York Stock Exchange-listed Edwards Lifesciences Corp and Denmark-based Ambu, both of which have signed long-term agreements with the company.
Shiue highlighted that the group had been in business with its clients for more than 10 years and, on average, orders increased by 5% to 10% every year, whether or not there was a recession.
Supercomnet recorded a 55% year-on-year (y-o-y) jump in net profit to RM18.82 million for the financial year ended Dec 31, 2019 (FY19), mostly driven by its unit SMP, which is deemed the jewel in the group’s crown. Revenue grew 39% y-o-y to RM122.97 million. It will report its March quarter results for FY20 this month.
The group has been posting record revenue and earnings since FY18 after the acquisition of the remaining 80% stake in SMP in April 2018, part of its efforts to diversify its revenue streams in the competitive wire and cable industry.
The medical device segment has been the driver of the group’s growth over the last three years, a situation Shiue does not see changing anytime soon.
The revenue contribution from the medical device segment is predicted to surpass that of the automotive segment for the first time this year from a 50:50 share in FY19.
Of the group’s immediate plans, Shiue said Supercomnet will put all its efforts into delivering orders to its clients, and it had allocated capital expenditure of about RM7 million to RM8 million for FY20.