Mega Lifesciences shares rocket to 6.5-month high on healthy 1Q results

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Mega Lifesciences Plc (MEGA), a producer and distributor of food supplements and pharmaceuticals, saw its shares surge almost 14 per cent on Tuesday after reporting a record-high net profit in the first quarter of 614 million baht. 

MEGA peaked at 55.25 baht, up 13.9 per cent from its prior closing. The price hit the highest level since late November 2021. 

Driven by growing healthcare trends amid the Covid-19 pandemic and gains from the weakening of the Thai baht, the company booked a jump of 84 per cent year-on-year. In 2021, MEGA’s full-year earnings stood at 1.95 billion baht, a rise from 1.4 billion baht in 2020.

“Revenue growth was partly due to the depreciation of Thai baht against the US dollar,” said the earnings statement by MEGA. 

As of Tuesday’s afternoon, Thai baht was trading at 34.6 baht per US dollar. Earlier this morning, the Thai currency hit a five-year low at 34.79 baht per US dollar.

Jitra Amornthum, an analyst at Finansia Syrus Securities, said in a note that MEGA’s first-quarter performance was “really impressive.” She said the first-quarter results of MEGA were above her projections. 

“Even though the baht remained at the same level as in the first quarter of last year, the profit increase would still be 50 per cent year-on-year,” Jitra added. 

According to MEGA, Southeast Asia countries contributed the largest sales revenue in the first quarter, followed by those in Africa. MEGA runs two factories in Thailand, one complementary medicine production plant in Australia, and one pharmaceutical plant in Indonesia.

With upsides from new products and strong healthcare demand, Thanawich Boonchowong, an analyst at Pi Securities, said he expects MEGA’s businesses to grow further in 2022 and 2023.

“Competition in emerging markets is lower than those in developed countries,” Thanawich observed.

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