UG Healthcare SGX: 41A - Put on This Glove; Initiate Coverage With ADD
- We believe UG Healthcare’s manufacturing cum distribution model allows for higher ASP hike potential amid strong glove demand due to the Covid-19 outbreak.
- We expect UG Healthcare to benefit from
- higher ASPs,
- stronger volume, and
- higher margins, and forecast net profit to quadruple in FY20F.
- We believe valuation is attractive at 8.7x CY21F P/E. Initiate with an ADD rating and Target Price of S$1.36, based on 15x CY21F P/E (40% discount to peers).
UG Healthcare - Company Background
- Established in 1989, UG Healthcare (SGX:41A) is a Malaysia-based glove manufacturer with its own global downstream distribution network that markets and sells disposable glove products under its proprietary “Unigloves” brand.
UG Healthcare - Valuation & RecommendationUnder-appreciated stock in the glove sector; initiate with ADD rating and Target Price of S$1.36
Summary of analysis to be updated. Meanwhile, click on 'view full report' button below to see attached 23-page PDF report for complete analysis on UG Healthcare (SGX:41A).
Source: CGS-CIMB Research - 22 Jun 2020