MEGA reports robust third-quarter profits with no impact from coronavirus outbreak in Myanmar

MEGA Lifesciences PCL (MEGA), a leading healthcare products manufacturer and distributor, reported a strong quarterly net profit at 342 million baht, up 21 per cent year-on-year, with no downturn from the outbreak in the Myanmar market.

The company operates its sub-segment brand, Maxxcare, in Myanmar, Vietnam and Cambodia in which Myanmar accounted for 73.5 per cent of its revenue from the first half of 2020.

Mega’s profit in the third quarter increased by 13 per cent compared to the second quarter this year, exceeding the estimate from KGI Securities by 25 per cent.

Driven by higher contribution from Myanmar, MEGA recorded distribution revenue of 1.9 billion baht (up 29.9 per cent year-on-year and 45.2 per cent quarter-on-quarter) which constituted around 75 per cent of it sub-segment’s revenue of MC’s revenue.

Meanwhile, the total sale rose 19 per cent year-on-year to 3.4 billion baht with improvement seen in all segments.

Earlier, the healthcare company has notified SET that it mutually agreed with MSN Laboratories Private Limited to terminate their joint venture (JV) contract, causing 40.9 million of loss in the third quarter.

Panuwat Nivedmarintre, KGI analyst said that “this should not have an impact on our earnings forecast since we had not included it. However, this may be negative to MEGA’s long-term growth.”

The net profit in nine months stood at 965 million baht, up 28 per cent year-on-year. The strong performance has already accounted for 75 per cent of KGI’s full-year forecast.

KGI maintains a rating of ‘Outperform’ on the stock with an unchanged target price of 40.00 baht.

As of 14.58 p.m. on Monday trade, MEGA stock price traded at 34.25 baht per share, up 0.74 per cent, with a transaction value of 32.5 million baht. Earlier on Friday, it gained 7.09 per cent up when the market closed.

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