Medtecs shares pare back early gains from stellar Q3 results

Medtecs International shares fell back to earth yesterday after initially shooting up on the back of stellar third-quarter results that were boosted by explosive global demand for personal protective equipment (PPE).

The Catalist-listed stock climbed by as much as 7.4 per cent in the morning session, but then went into reverse to close 8 per cent down at $1.36, with 75 million shares changing hands.

The counter was the third-most actively traded on the bourse, with around 70 large trades - each valued over $150,000 - recorded in the morning session, noted ShareInvestor.

Medtecs shares rallied this year amid the Covid-19 outbreak and are up around 4,140 per cent from 3.7 cents at the end of last year.

The firm reported after markets closed on Tuesday that third-quarter revenue jumped 636 per cent to US$124.6 million (S$169.2 million) compared with a year earlier, while net profit surged by 1,115 per cent to US$45.7 million.

The coronavirus pandemic has sparked a global demand for PPE, which the company expects to remain strong given the prospect of a vaccine is still uncertain.

Medtecs has been providing one-stop, bundled services to meet demand for head-to-toe protection by supplementing its existing products with those from third-party vendors. It also used e-commerce platforms and data analysis to source potential customers and new vendors.

The firm has developed its own CoverU line of PPE. Sales of products carrying its own label made up more than 68 per cent of total turnover in the nine months to Sept 30, it noted on Tuesday.

"With long-term indicative orders in hand and stabilising raw material prices, the company expects to report record revenue and profit in the fourth quarter and financial year ending Dec 31," it added.

Proportion of turnover contributed by Medtecs' own product label in the nine months to Sept 30.

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