UG Healthcare SGX: 41A - Put on This Glove; Initiate Coverage With ADD

UG Healthcare SGX: 41A  - Put on This Glove; Initiate Coverage With ADD

• We believe UG Healthcare’s manufacturing cum distribution model allows for higher ASP hike potential amid strong glove demand due to the Covid-19 outbreak.
• We expect UG Healthcare to benefit from
  1. higher ASPs,
  2. stronger volume, and
  3. higher margins, and forecast net profit to quadruple in FY20F.
• We believe valuation is attractive at 8.7x CY21F P/E. Initiate with an ADD rating and Target Price of S$1.36, based on 15x CY21F P/E (40% discount to peers).

UG Healthcare - Company Background

• Established in 1989, UG Healthcare (SGX:41A) is a Malaysia-based glove manufacturer with its own global downstream distribution network that markets and sells disposable glove products under its proprietary “Unigloves” brand.

UG Healthcare - Valuation & Recommendation

Under-appreciated stock in the glove sector; initiate with ADD rating and Target Price of S$1.36
Summary of analysis to be updated. Meanwhile, click on 'view full report' button below to see attached 23-page PDF report for complete analysis on UG Healthcare (SGX:41A).

Source: CGS-CIMB Research - 22 Jun 2020

https://sgx.i3investor.com/blogs/simonsg/2020-06-22-story-h48793553-UG_Healthcare_Put_on_This_Glove_Initiate_Coverage_With_ADD.jsp