Mega Lifesciences surges on healthcare trend

Shares of Mega Lifesciences Plc (MEGA), a healthcare products manufacturer, surged by more than 10 per cent to an all-time high on Tuesday, with analysts anticipating strong earnings in light of healthcare trends following the Covid-19 pandemic.

The stock peaked at 51.25 baht, up 10.81 per cent from its prior closing, before settling at 49.75 baht as of 2.49 pm, still up 7.57 per cent. It accounted for a transaction value of 981.3 million abht.

After the company reported record-high second-quarter profits of 504.8 million baht last week, up by 66 per cent year-on-year, analysts expected Mega to gain strong profits in the remainder of the year.

An analyst at Finansia Syrus Securities upgraded Mega’s target price from 48 baht to 56 baht, saying that the company is developing more healthcare products in the second half of2021.

In the fourth quarter, Mega will begin selling a new product containing green chiretta, a herb-based drug suggested by Thai doctors as a substitute for Favipiravir for Covid-19 patients with mild symptoms, the analyst said.

Finansia Syrus revised up Mega’s full-year earnings in 2021 by 18 per cent to 1.73 billion baht, which is up 26 per cent compared to 2020.

A KTB analyst also increased Mega’s 2021 earnings projection to 1.68 billion baht, up 21 per cent year-on-year, citing an additional upside from the upcoming hemp-related product.

“Rising Covid infections have increased demand for its vitamins to boost immunity,” said Krungsri analysts in a note. Any drop in sales of Mega’s products from the lockdown in Thailand last year and neighboring countries will bounce back soon, he added.

Mega was one of the Thailand-based companies affected by the military coup in Myanmar earlier this year that froze many economic activities.

However, Krungsri analysts warned that the opportunity for speculative move on Mega’s strong 2Q earning had perhaps already passed. They noted that corporate and institutional investors had sold out some of their holdings while prices were rising after the 2Q results were released.

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