UG Healthcare - OBM Model Bears Fruits
- UG Healthcare (SGX:8K7)'s 2QFY22 (Oct 2021 to Dec 2021) results in line with expectations. Net profit was flattish q-o-q as volume recovery offset weakness in ASPs.
- End-demand recovering well; UG Healthcare has stepped up outsourcing efforts as distribution margins improved, with end-market pricing relatively sticky.
- We believe UG Healthcare’s OBM (own-brand manufacturing) model enables it to fare better than OEM peers, which currently face pricing pressure.
- Reiterate ADD call on UG Healthcare and target price of S$0.42, based on 11.2x CY23F P/E (a 30% discount to the glove sector’s historical mean).
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
ONG Khang Chuen CFA CGS-CIMB Research | https://www.cgs-cimb.com 2022-02-16 2022-02-16
Previous report by CGS-CIMB:
2021-11-16 UG Healthcare - Concerns Over Lower ASPs Largely Priced In
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