Short Position - Ucrest and Sputnik, Lockdown
Ucrest and Sputnik
OF all the locally-listed firms getting involved in the Covid-19 vaccine, Ucrest Bhd’s efforts do stand out.
This company, with a market capitalisation of RM236mil and a patchy profit track record, has inked a deal to manage the contract manufacturing for the Sputnik V vaccine.
On April 9, Ucrest said it had inked an MoU with Russian Direct Investment Fund or RDIF to manage contract manufacturing in Asia for the latter, in order to produce Sputnik V. RFID is a government entity responsible for the commercialisation of Sputnik V. However, what Ucrest has not revealed is the reason why RFID has handpicked Ucrest for this role.
After all, Ucrest is not a manufacturer of any drugs let alone vaccines, so one wonders what skill sets it has in order to be able to play the role of identifying and managing contract manufacturers for a vaccine.
In reply to a further query from Bursa Malaysia as to how Ucrest would derive revenue from the arrangement, Ucrest says that RDIF will purchase the vaccines from UCrest and UCrest will be outsourcing the production to manufacturing partners. If this materialises it would be a sweet deal for Ucrest, although again, one wonders what is Ucrest’s strength to be able to be given such a sweet role.
To be fair, Ucrest is involved in the medical sector but that is as a technology provider. It’s i-Medic cloud services enable users to store their medical records safely and share them securely with healthcare professionals and is used by doctors and patients in various countries, including Russia.
What has excited investors chasing up Ucrest shares is the fact that the company now says it has inked agreements with two China based contract manufacturers to produce massive amounts of the Sputnik vaccine.
In fact, Ucrest points out that RFID will purchase from Ucrest not less than 100 million doses and not more than one billion doses of the vaccine per annum for the first two years. For perspective, the only Malaysian company allowed to bring in the Sputnik vaccine into the country is Duopharma Biotech Bhd which just signed an agreement with the government to supply 6.4 million doses of the vaccine to Malaysia.
Whatever the case, the deal between Ucrest and RFID is merely at an MoU level at this point.
All eyes should be on the detailed and definite agreement between the two parties. Hopefully that will come out soon.
It rests with us
AS Malaysians get accustomed to yet another lockdown, the immediate intent of it is to reduce the spread of the virus among the people.With daily rates hitting numbers unexpected some months ago, the tough decision of ensures lives are protected was made with keeping the essential elements of the economy chugging along.
The consequence of the lockdown has another fold which is economically.
With a large part of businesses shut, the intended pop in economic growth in the second quarter will be muted than what was earlier projected.
The result is that economic growth for the full year will come in lower than the official projection of between 6% and 7.5% for 2021.
The other unfortunate impact will be on employment with the slow drop in unemployment might reverse if Malaysia does not reel in the spread of the virus fast enough.
The mutations of the virus and its ease of transmissibility is a fight like never before but examples from countries that are containing and reducing the overall spread of the virus teaches us one important lesson.
Getting vaccinated is the best way of not only protecting lives but also livelihood. As vaccinations have shown the drop the rate of infections in countries where a large number of the population has at least got their first dose,Getting vaccinated is the best way of not only protecting lives but also livelihood. As vaccinations have shown the drop the rate of infections in countries where a large number of the population has at least got their first dose,
Getting vaccinated is the best way of not only protecting lives but also livelihood. As vaccinations have shown the drop the rate of infections in countries where a large number of the population has at least got their first dose,
it is apparent that the best deterrent against future economic calamities from the virus is for people to get their jabs as fast as possible.
With the pace of supply scheduled to rise, the high number of cases is also injected some urgency in the number of people willing to get the vaccine.
With 12.6 million Malaysians indicated their intent to get the vaccine, the increase in the speed of vaccination will mean curtailing the future economic impact from the virus.
That will mean that businesses will be allowed to operate more and more like normal, and that is important for an economy that is dependent on domestic demand.Our exports continue to do well with the electrical and electronic sector, along with commodities such as oil and gas, and palm oil enjoying high prices.
But its is allowing daily lives to return to normal that will be the real fifth gear for the economy.
There is so much savings and pent-up demand that only a significant drop in the daily case number will encourage more optimism among the public.With job security that a stable economy offers, then expect a revision to higher growth rates.
But that can only start with us Malaysians. Following the SOP and getting vaccinated is the sure-fire way of a return to normalcy and job security that all of us crave after a lengthy period that has been wrecked by the pandemic.