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Articles from Caixin Global

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News from Caixin

Equity Bottom-Up

<ul><li>Kuaishou Technology Co. Ltd., the operator of China’s second-largest short video app, unveiled the new video cloud brand StreamLake and a self-developed intelligent video processing chip Wednesday in key moves to expand its business</li><li>The launch of StreamLake, the first enterprise-facing product from Kuaishou, marks the short-video platform operator’s official entry into the cloud services market and a shift from its original consumer-focused businesses</li><li>StreamLake will provide artificial intelligence-powered video creation and distribution solutions for corporate clients, Kuaishou said.</li></ul>

Kuaishou Technology Co. Ltd., the operator of China’s second-largest short video app, unveiled the new video cloud brand StreamLake and a self-developed intelligent video processing chip Wednesday in key moves to expand its businessThe launch of StreamLake, the first enterprise-facing product from Kuaishou, marks the short-video platform operator’s official entry into the cloud services market and a shift from its original consumer-focused businessesStreamLake will provide artificial intelligence-powered video creation and distribution solutions for corporate clients, Kuaishou said.

Kuaishou Dives Into Cloud Services and Chipmaking

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

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<ul>
<li>
Daily Leverage Certificates (DLCs) offer flexibility to trade both rising and falling markets, with long or short 5x or 7x leveraged exposure, on the daily performance of selected Singapore and Hong Kong stocks and Indices. With S&amp;P 500 DLCs scheduled to list tomorrow, the current total offering will expand to 246 DLCs. 
	 </li>
	<li>
Recently, UBS issued 10 DLCs focused on the Hong Kong stock market, which included Long and Short 5x DLCs on the largest three technology stocks of the Hang Seng Index, Tencent (700), Alibaba Group (9988) and Meituan (3690), with the heavyweight trio representing as much as 20% of the Index. 
	 </li>
	<li>Meituan has showed the most volatility of the trio in 2022. On 18 Feb, the price ratio spread of Meituan to the Hang Seng Index reached a 20 month low, with a three-session Short Meituan/Long Hang Seng Index 5x leveraged trade returning 6% (excl. transaction fees) to accredited investors. </li>
</ul>
 
Daily Leverage Certificates (DLCs) are financial instruments issued by a third-party financial institution that have been traded on SGX since 2017. Designed for accredited investors, DLCs seek to achieve short-term investment results that correspond to the daily magnified performance of the underlying index or stock. For a more comprehensive overview click <a href="https://www.sgx.com/research-education/securities-products#Daily%20Leverage%20Certificates">here</a>. 
Of the 242 DLCs currently listed for trading in Singapore, Société Générale are the issuer of 232 DLCs, with UBS issuing 10 DLCs on 15 Feb. These 10 Long and Short DLCs offer long/short fixed leverage of 5x the daily performance of Tencent (700), Alibaba Group (9988) and Meituan (3690) and BYD (1211), in addition to 7x the daily performance of the Hang Seng Index (HSI). Together, the largest technology stocks of the HSI, Tencent, Alibaba Group and Meituan (3690) comprise more than 20% of its weight. Combined, the trio maintain a market value of HKD 7.4 trillion (~S$1.3 trillion). Tencent is Hong Kong’s largest stock by market value with a cap of HKD 4.1 trillion (~S$720 billion) and for comparative size, its 9MFY21 (ended 30 Sep) reported revenue of RMB 416 billion (~S$88 billion), with attributable profit of RMB 130 billion (~S$28 billion).  
The three HSI heavyweights declined 19%, 49% and 23% respectively in 2021, weighing the HSI which ended 2021 down 14%. The first two months of 2022 has seen the three heavyweights decline 5%, 12% and 24% respectively, with the HSI declining 3%. The three stocks have a history of being big movers, with Tencent gaining 110% over the past five years, Alibaba declining 41% since listing in Hong Kong in Nov 2019, and Meituan gaining 150% since listing in Sep 2018. Going into March, the trio maintained annualised 30-day historical volatility of 35%, 60% and 70%. As the IMF <a href="https://www.imf.org/en/Publications/CR/Issues/2022/01/26/Peoples-Republic-of-China-2021-Article-IV-Consultation-Press-Release-Staff-Report-and-512248">noted</a> in last January, a wave of regulatory policy measures targeting the China technology sector in 2021, while intended to strengthen competition, consumer privacy, and data governance, increased policy uncertainty. This extended to increased volatility in the relevant technology stocks in 2021.   
With Meituan demonstrating the highest 30-day volatility of the three stocks, the recent moves of the e-commerce platform can be applied to demonstrate and educative application of Daily Leverage Certificates (“DLCs”).   Example of Meituan/HSI DLC Pairs Trade 
Back on 18 Feb, the price ratio spread of Meituan (HKD 188.0) to the HSI (24,327) reached a low (0.0077) not seen since late July 2020. Investors who anticipated that the price ratio spread of Meituan to the HSI would decline further could buy the UB 5x Short Meituan [HMMW] and Buy the SG 5x Long HSI [CWAW]. 
The UB 5x Short Meituan [HMMW] ended the 18 Feb session at S$0.986 per unit and the SG 5x Long HSI [CWAW] ended the 18 Feb session at S$0.397 per unit. Note the DLC standard board lot size is 100 units. Investing close to S$10,000 on each leg positioned the trade to provide a return if the share price of Meituan continued to underperform the HSI.   
Three sessions later, the price ratio spread of Meituan (HKD 176.60) to the HSI (23,660) had turned higher, to 0.0075 on 23 Feb, from 0.0073 on 22 Feb. The price ratio also closed above two standard deviations of the price ratio spread’s 1-month mean (0.0074).
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<figure>
 <img src='https://api2.sgx.com/sites/default/files/2022-03/Capture_3.PNG' alt='Underlying close prices' />
 </figure>
 <div class='content-caption'>Underlying close prices</div>
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Had the accredited investor closed the position on the 23 Feb, it would have led to a 26% return on the UB 5x Short Meituan [HMMW] and a 14% decline on the SG 5x Long HSI [CWAW]. Basically, both markets declined, however Meituan had continued to trader with higher beta and decline more than the Hang Seng Index over the three sessions.

<table class="table table-striped"><tbody>
<tr>
<td>
			DLC
			</td>
			<td>
			Code
			</td>
			<td>
			Issuer
			</td>
			<td>
			Type
			</td>
			<td>
			Leverage Factor
			</td>
			<td>
			Underlying
			</td>
			<td>
			18 Feb  Price
			</td>
			<td>
			Units
			</td>
			<td>
			18 Feb Notional
			</td>
			<td>
			23 Feb  Price
			</td>
			<td>
			23 Feb Notional
			</td>
			<td>
			Return
			</td>
		</tr>
<tr>
<td>
			Meituan 5xShortUB241231
			</td>
			<td>
			HMMW
			</td>
			<td>
			UB
			</td>
			<td>
			Daily Short
			</td>
			<td>
			-5x
			</td>
			<td>
			Meituan
			</td>
			<td>
			0.986
			</td>
			<td>
			10,100
			</td>
			<td>
			$9,959
			</td>
			<td>
			1.246
			</td>
			<td>
			$12,585
			</td>
			<td>
			26%
			</td>
		</tr>
<tr>
<td>
			HSI 5xLongSG230420
			</td>
			<td>
			CWAW
			</td>
			<td>
			SG
			</td>
			<td>
			Daily Long
			</td>
			<td>
			5x
			</td>
			<td>
			HSI
			</td>
			<td>
			0.397
			</td>
			<td>
			25,200
			</td>
			<td>
			$10,004
			</td>
			<td>
			0.341
			</td>
			<td>
			$8,593
			</td>
			<td>
			-14%
			</td>
		</tr>
<tr>
<td>
			Total
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			$19,963
			</td>
			<td>
			 
			</td>
			<td>
			$21,178
			</td>
			<td>
			 
			</td>
		</tr>
</tbody></table>
Like the stock market, the DLC full-day <a href="https://www.sgx.com/securities/trading">trading</a> Pre-Close period is 5:00pm to 05:04pm/05:05pm, with the Pre-Open/Close phase ending randomly at any time within the 05:04pm/5:05pm one minute window, with the Non-Cancel phase begins immediately after. For pricing information click <a href="https://www.sgx.com/securities/securities-prices?code=dlcertificates">here</a>. 
The above short-term trade generated a return of 6.1%, with the initial investment of S$19,963 excluding transaction fees growing to S$23,350 on 22 Feb, then to S$21,178 on 23 Feb.  At the same time, the accredited investor mitigated part of the market risk of the pairs trade to the price ratio between Meituan and the HSI, with the anticipation that Meituan would continue to underperform the HSI. 
While the UB 5x Short Meituan [HMMW] leg returned S$2,626, the SG 5x Long HSI [CWAW] leg generated a decline of S$1,411, generating an indicative net return of S$1,215 excluding transaction fees. During the three trading sessions spanning the close of 18 Feb to the 23 Feb close, the share price of Meituan declined, while the HSI also declined. 
Note had the accredit investor taken the converse position with a long Meituan position and short HSI with the same leverage factor that would have made a loss within the vicinity of -6%.  Also note that the performance of the DLC may vary from the leverage factor of the DLC. This is because the performance of the underlying asset and the DLC is reset at the end of each trading day. 
Note the above prices are based on the relevant DLC daily close prices. 
Please note that DLCs are Specified Investment Products (SIPs).
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<figure>
 <img src='https://api2.sgx.com/sites/default/files/2022-03/Capture_4.PNG' alt='Gain access to more investment opportunities ' />
 </figure>
 <div class='content-caption'>Gain access to more investment opportunities </div>





Daily Leverage Certificates (DLCs) offer flexibility to trade both rising and falling markets, with long or short 5x or 7x leveraged exposure, on the daily performance of selected Singapore and Hong Kong stocks and Indices. With S&amp;P 500 DLCs scheduled to list tomorrow, the current total offering will expand to 246 DLCs.  
	 
	
Recently, UBS issued 10 DLCs focused on the Hong Kong stock market, which included Long and Short 5x DLCs on the largest three technology stocks of the Hang Seng Index, Tencent (700), Alibaba Group (9988) and Meituan (3690), with the heavyweight trio representing as much as 20% of the Index.  
	 
	Meituan has showed the most volatility of the trio in 2022. On 18 Feb, the price ratio spread of Meituan to the Hang Seng Index reached a 20 month low, with a three-session Short Meituan/Long Hang Seng Index 5x leveraged trade returning 6% (excl. transaction fees) to accredited investors. 

 
Daily Leverage Certificates (DLCs) are financial instruments issued by a third-party financial institution that have been traded on SGX since 2017. Designed for accredited investors, DLCs seek to achieve short-term investment results that correspond to the daily magnified performance of the underlying index or stock. For a more comprehensive overview click here.  
Of the 242 DLCs currently listed for trading in Singapore, Société Générale are the issuer of 232 DLCs, with UBS issuing 10 DLCs on 15 Feb. These 10 Long and Short DLCs offer long/short fixed leverage of 5x the daily performance of Tencent (700), Alibaba Group (9988) and Meituan (3690) and BYD (1211), in addition to 7x the daily performance of the Hang Seng Index (HSI).  Together, the largest technology stocks of the HSI, Tencent, Alibaba Group and Meituan (3690) comprise more than 20% of its weight. Combined, the trio maintain a market value of HKD 7.4 trillion (~S$1.3 trillion). Tencent is Hong Kong’s largest stock by market value with a cap of HKD 4.1 trillion (~S$720 billion) and for comparative size, its 9MFY21 (ended 30 Sep) reported revenue of RMB 416 billion (~S$88 billion), with attributable profit of RMB 130 billion (~S$28 billion).   
The three HSI heavyweights declined 19%, 49% and 23% respectively in 2021, weighing the HSI which ended 2021 down 14%. The first two months of 2022 has seen the three heavyweights decline 5%, 12% and 24% respectively, with the HSI declining 3%.  The three stocks have a history of being big movers, with Tencent gaining 110% over the past five years, Alibaba declining 41% since listing in Hong Kong in Nov 2019, and Meituan gaining 150% since listing in Sep 2018. Going into March, the trio maintained annualised 30-day historical volatility of 35%, 60% and 70%. As the IMF noted in last January, a wave of regulatory policy measures targeting the China technology sector in 2021, while intended to strengthen competition, consumer privacy, and data governance, increased policy uncertainty. This extended to increased volatility in the relevant technology stocks in 2021.    
With Meituan demonstrating the highest 30-day volatility of the three stocks, the recent moves of the e-commerce platform can be applied to demonstrate and educative application of Daily Leverage Certificates (“DLCs”).    Example of Meituan/HSI DLC Pairs Trade  
Back on 18 Feb, the price ratio spread of Meituan (HKD 188.0) to the HSI (24,327) reached a low (0.0077) not seen since late July 2020. Investors who anticipated that the price ratio spread of Meituan to the HSI would decline further could buy the UB 5x Short Meituan [HMMW] and Buy the SG 5x Long HSI [CWAW].  
The UB 5x Short Meituan [HMMW] ended the 18 Feb session at S$0.986 per unit and the SG 5x Long HSI [CWAW] ended the 18 Feb session at S$0.397 per unit. Note the DLC standard board lot size is 100 units. Investing close to S$10,000 on each leg positioned the trade to provide a return if the share price of Meituan continued to underperform the HSI.    
Three sessions later, the price ratio spread of Meituan (HKD 176.60) to the HSI (23,660) had turned higher, to 0.0075 on 23 Feb, from 0.0073 on 22 Feb. The price ratio also closed above two standard deviations of the price ratio spread’s 1-month mean (0.0074).



      
    
    Underlying close prices


Had the accredited investor closed the position on the 23 Feb, it would have led to a 26% return on the UB 5x Short Meituan [HMMW] and a 14% decline on the SG 5x Long HSI [CWAW]. Basically, both markets declined, however Meituan had continued to trader with higher beta and decline more than the Hang Seng Index over the three sessions.




			DLC
			
			
			Code
			
			
			Issuer
			
			
			Type
			
			
			Leverage Factor
			
			
			Underlying
			
			
			18 Feb  Price
			
			
			Units
			
			
			18 Feb Notional
			
			
			23 Feb  Price
			
			
			23 Feb Notional
			
			
			Return
			
		


			Meituan 5xShortUB241231
			
			
			HMMW
			
			
			UB
			
			
			Daily Short
			
			
			-5x
			
			
			Meituan
			
			
			0.986
			
			
			10,100
			
			
			$9,959
			
			
			1.246
			
			
			$12,585
			
			
			26%
			
		


			HSI 5xLongSG230420
			
			
			CWAW
			
			
			SG
			
			
			Daily Long
			
			
			5x
			
			
			HSI
			
			
			0.397
			
			
			25,200
			
			
			$10,004
			
			
			0.341
			
			
			$8,593
			
			
			-14%
			
		


			Total
			
			
			 
			
			
			 
			
			
			 
			
			
			 
			
			
			 
			
			
			 
			
			
			 
			
			
			$19,963
			
			
			 
			
			
			$21,178
			
			
			 
			
		

Like the stock market, the DLC full-day trading Pre-Close period is 5:00pm to 05:04pm/05:05pm, with the Pre-Open/Close phase ending randomly at any time within the 05:04pm/5:05pm one minute window, with the Non-Cancel phase begins immediately after. For pricing information click here.  
The above short-term trade generated a return of 6.1%, with the initial investment of S$19,963 excluding transaction fees growing to S$23,350 on 22 Feb, then to S$21,178 on 23 Feb.  At the same time, the accredited investor mitigated part of the market risk of the pairs trade to the price ratio between Meituan and the HSI, with the anticipation that Meituan would continue to underperform the HSI.  
While the UB 5x Short Meituan [HMMW] leg returned S$2,626, the SG 5x Long HSI [CWAW] leg generated a decline of S$1,411, generating an indicative net return of S$1,215 excluding transaction fees. During the three trading sessions spanning the close of 18 Feb to the 23 Feb close, the share price of Meituan declined, while the HSI also declined.  
Note had the accredit investor taken the converse position with a long Meituan position and short HSI with the same leverage factor that would have made a loss within the vicinity of -6%.  Also note that the performance of the DLC may vary from the leverage factor of the DLC. This is because the performance of the underlying asset and the DLC is reset at the end of each trading day.  
Note the above prices are based on the relevant DLC daily close prices.  
Please note that DLCs are Specified Investment Products (SIPs).



      
    
    Gain access to more investment opportunities 

DLC Suite Expands, Providing More Opportunities to Harness Volatility 

Research from EqualOcean, EqualOcean

EqualOcean

Research from EqualOcean

EqualOcean is an investment research firm and information service provider focusing on China's Technology, Automotive and Consumer Internet sectors. With unique research and due diligence methodology, we provide tailored insights into a wide range of industries and companies, empowering our clients' value-added decisions.

Founded in 2014, EqualOcean is headquartered in Beijing and has offices in Shanghai, Shenzhen and New York.

<ul><li>ByteDance's ambition in healthcare - According to EqualOcean data, ByteDance has invested in 56 companies in 2021 only</li><li>Expanding in adjacent fields - It is generally easier to invest in areas that are more compatible with a company's core businesses.</li><li>Still, a long way to go - Online healthcare is a domain full of risks. </li></ul>

ByteDance's ambition in healthcare - According to EqualOcean data, ByteDance has invested in 56 companies in 2021 onlyExpanding in adjacent fields - It is generally easier to invest in areas that are more compatible with a company's core businesses.Still, a long way to go - Online healthcare is a domain full of risks. 

A Late Starter, ByteDance Begins to Accelerate Its Effort in Healthcare

<figure>
 <img src='https://api2.sgx.com/sites/default/files/2021-08/Medtecs-CEO.jpeg' alt='Medtecs - CEO' />
 </figure>
 <div class='content-caption'>Medtecs - CEO</div>
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Engineer-by-training William Yang prefers the road less travelled.  
For the Chief Executive of Medtecs International Corporation, consciously choosing not to conform to prevailing norms or accept the status quo has made all the difference in his life, and to the fortunes of the SGX-listed personal protective equipment (PPE) manufacturer. 
“We need to challenge and re-assess the status quo from time to time, in order for the human race to progress in a meaningful way,” Yang pointed out. “The same goes for any business.” 
After graduating from the New York Institute of Technology with a degree in Electrical and Computer Engineering in 2005, Yang returned to Taiwan to join Medtecs, a company that his father - a textile industry veteran - had founded in 1989 to manufacture hospital garments. 
He learned the ropes by starting off as an Executive Assistant to his father - Medtecs Executive Chairman Clement Yang - before moving between roles, departments and companies within the Group over the next decade. A feather in his cap was his successful overhaul and turnaround of the Group’s then loss-making Shanghai subsidiary.  
Yang was appointed to succeed his father as Chief Executive Officer in 2018, and was named the Group’s Deputy Chairman in February this year. 
“My engineering background trained me to be analytical and inquisitive at the same time,” he recalled. “This honed my ability to look at problems from multiple angles in order to come up with the best solutions.” 
Today, Medtecs is a leading PPE and hospital services provider, with manufacturing facilities in the Philippines, Cambodia and China. The Group is a key supplier to global PPE companies, and exports to over 30 countries, including Europe, US, Southeast Asia, North Asia and Australia.  
As a hospital services provider, Medtecs provides hospitals in Taiwan and the Philippines with integrated services that include rental and laundry of linens, management of laundry facilities, hospital automation, as well as procurement solutions for PPE and medical devices needs. 
The Group was listed on the then Sesdaq board in 1999 and transitioned to SGX Catalist in 2010. Its Taiwan Depository Receipts (TDRs) have been listed on the Taiwan Stock Exchange (TWSE) since 2002. One-Stop Shop 
Yang attributes Medtecs’ success to its “Source and Sell Globally” strategy that provides one-stop, bundled services to meet client demand by supplementing existing sources with those from third-party vendors in a variety of locations.  
“Medtecs had the foresight to expand its network of suppliers four years ago. As a result, when COVID-19 disrupted supply chains, we didn’t need to waste time and resources validating new suppliers, because we already had a long list of trustworthy names to meet the increased demand,” he explained. 
“When order volumes surged, we scaled up quickly and still managed to deliver on time during the peak of the global pandemic. This has spurred the Group’s transformation from a medical consumables manufacturer into an integrated multi-national PPE solutions provider with one-stop-shop capability.” 
As a testament to its achievements, Medtecs reported record revenue and net profit for its financial year ended 31 December 2020. Total revenue jumped nearly six-fold to US$400.3 million on the back of a global surge in demand for PPE following COVID-19, while net profit soared to US$131.7 million from US$1.2 million a year earlier.  
Looking ahead, Medtecs will continue to focus on rolling out proprietary products to meet customer needs. It already produces its own CoverU brand of PPE products. This year, it launched Medtecs Shield, a new line of antiviral offerings that includes masks, mobile phone cases and sprays, all of which are integrated with nanotechnologies that can kill viruses and bacteria. 
“We believe these products are essential for everyone, not just healthcare workers, in the current pandemic environment,” Yang added. 
Apart from offline channels like convenience shops and department stores, the Group also leverages major e-commerce sites such as Alibaba and Amazon to sell its PPE range. “We’re also looking to set up distribution channels across North America, Japan and Europe to extend the reach of our products.” Fortifying Its Position 
While demand remains robust, challenges loom, not the least of which are the US-China trade spat and the ongoing pandemic, Yang pointed out. 
“US-China trade tensions continue to threaten a supply chain that is already weakened by COVID-19, and in order to mitigate the impact, Medtecs will continue to work with like-minded partners to tap synergies,” he added. 
The Group has established a series of strategic partnerships in recent months to ensure its supply chains remain protected and undisrupted.  
To deliver sustainable business growth, Medtecs has doubled up on its engagements with group purchasing organisations, institutional clients and government agencies to offer its PPE stockpiling services. As a result, it has secured several supply contracts in the Philippines and Cambodia for the first quarter ended 31 March 2021.  
“We’ve started site selection for the construction of an additional PPE manufacturing facility to fortify our position as a leading PPE stockpiling provider,” Yang noted. 
“We’re also focused on expanding our retail business through our Medtecs-branded products, as well as leveraging e-commerce to widen our customer reach and build brand awareness.” 
According to a recently published report by Research Dive, the global PPE market was valued at US$43.9 billion in 2018 and is anticipated to surge to US$93.5 billion by 2026, expanding at a compound annual growth rate (CAGR) of 10%. Currently, the market is worth approximately US$51.8 billion, as demand continues to rise. 
Apart from adopting multiple countermeasures to ensure business continuity and boost sales, Medtecs has also identified new Environmental, Social and Corporate Governance (ESG) factors to manage. They include quality control, product labelling and responsibility, labour relations, employee training, as well as waste management. Reducing PPE Waste 
“One of the challenges we faced recently in implementing our ESG strategy was how to strike the right balance between protecting people from COVID-19 and conserving the environment,” Yang noted. 
To minimise the environmental impact associated with high volumes of single-use PPE due to the on-going pandemic, Medtecs’s R&amp;D team began working with partners and experimenting with different materials to create solutions to reduce PPE waste.  
“As a result, we developed the Weekly Disposable Anti-Viral Masks as part of our Medtecs Shield Collection. These masks can be worn up to seven days, odour-free, which allows wearers to simultaneously protect themselves from pathogens while caring for the environment through reduced wastage.” 
Undoubtedly, there is much to keep Yang up till the wee hours. “To be honest, I have not slept well since the outbreak of COVID-19 in early 2020,” he admitted. 
“Back in April last year, when the pandemic was nearing its peak, there was a severe global shortage of PPE and we were inundated with thousands of requests for our products from all over the world,” he recalled. 
“I worked super long hours, but couldn’t fall asleep when it was time for bed because the images of frontline workers wearing makeshift PPE, or none at all, haunted me. I would lie in bed thinking of ways to mobilise our resources and manpower, to get as many of these critical protective gear into our customers’ hands in as short a time as possible.” 
To de-stress, the 39-year-old plays Go or weiqi - a Chinese abstract strategy board game - with his sons, aged six and eight. 
“I’ve been playing Go since I was six - it’s a life-long passion of mine. It’s like an exercise for the brain, but at the same time, it takes my mind off work, so I feel more relaxed,” he said with a laugh. 
For his children, he has this advice: “Dream big, dream bold, and never settle for less than what you deserve”.  
“I’m not what you might call a tiger or a helicopter parent. In fact, I’m hands off when it comes to their school work, and I don’t demand perfect scores,” he said. 
“But I always emphasise the importance of believing in yourself and giving your best in whatever you do. If you fail at something, but you’ve already given 100%, then you’re good in my book.” Medtecs International Corporation Ltd 
Medtecs is a leading personal protective equipment (PPE) and hospital services provider, with manufacturing facilities in the Philippines, Cambodia and China. The Group is a key supplier to global PPE companies, and exports to over 30 countries, including Europe, US, Southeast Asia, North Asia and Australia. As a hospital services provider, Medtecs provides hospitals in Taiwan and the Philippines with integrated services that include rental and laundry of linens, management of laundry facilities, hospital automation, as well as procurement solutions for PPE and medical devices needs. The Group was listed on the then Sesdaq board in 1999 and transitioned to SGX Catalist in 2010. Its Taiwan Depository Receipts (TDRs) have been listed on the Taiwan Stock Exchange (TWSE) since 2002. 
The company website is: <a href="http://www.medtecs.com">www.medtecs.com</a> 
Click <a href="https://www.sgx.com/securities/equities/546">here </a>for the company's StockFacts page. 
For the six months ended 30 June 2021 financial results, click <a href="https://links.sgx.com/1.0.0/corporate-announcements/P96QD4LJYAQVD438/678858_Medtecs%20-%201H2021%20NR%20Framework%20%2013%20August%202021.pdf">here</a>. 
 

About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic Photo: Company file kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations. 
For previous editions of kopi-C: the Company brew, please click <a href="https://www.sgx.com/research-education/market-dialogues">here</a>.   
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to <a href="https://www.sgx.com/jennifer.t@sgx.com">jennifer.t@sgx.com</a>.
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    Medtecs - CEO


Engineer-by-training William Yang prefers the road less travelled.   
For the Chief Executive of Medtecs International Corporation, consciously choosing not to conform to prevailing norms or accept the status quo has made all the difference in his life, and to the fortunes of the SGX-listed personal protective equipment (PPE) manufacturer.  
“We need to challenge and re-assess the status quo from time to time, in order for the human race to progress in a meaningful way,” Yang pointed out. “The same goes for any business.”  
After graduating from the New York Institute of Technology with a degree in Electrical and Computer Engineering in 2005, Yang returned to Taiwan to join Medtecs, a company that his father - a textile industry veteran - had founded in 1989 to manufacture hospital garments.  
He learned the ropes by starting off as an Executive Assistant to his father - Medtecs Executive Chairman Clement Yang - before moving between roles, departments and companies within the Group over the next decade. A feather in his cap was his successful overhaul and turnaround of the Group’s then loss-making Shanghai subsidiary.   
Yang was appointed to succeed his father as Chief Executive Officer in 2018, and was named the Group’s Deputy Chairman in February this year.  
“My engineering background trained me to be analytical and inquisitive at the same time,” he recalled. “This honed my ability to look at problems from multiple angles in order to come up with the best solutions.”  
Today, Medtecs is a leading PPE and hospital services provider, with manufacturing facilities in the Philippines, Cambodia and China. The Group is a key supplier to global PPE companies, and exports to over 30 countries, including Europe, US, Southeast Asia, North Asia and Australia.   
As a hospital services provider, Medtecs provides hospitals in Taiwan and the Philippines with integrated services that include rental and laundry of linens, management of laundry facilities, hospital automation, as well as procurement solutions for PPE and medical devices needs.  
The Group was listed on the then Sesdaq board in 1999 and transitioned to SGX Catalist in 2010. Its Taiwan Depository Receipts (TDRs) have been listed on the Taiwan Stock Exchange (TWSE) since 2002.  One-Stop Shop  
Yang attributes Medtecs’ success to its “Source and Sell Globally” strategy that provides one-stop, bundled services to meet client demand by supplementing existing sources with those from third-party vendors in a variety of locations.   
“Medtecs had the foresight to expand its network of suppliers four years ago. As a result, when COVID-19 disrupted supply chains, we didn’t need to waste time and resources validating new suppliers, because we already had a long list of trustworthy names to meet the increased demand,” he explained.  
“When order volumes surged, we scaled up quickly and still managed to deliver on time during the peak of the global pandemic. This has spurred the Group’s transformation from a medical consumables manufacturer into an integrated multi-national PPE solutions provider with one-stop-shop capability.”  
As a testament to its achievements, Medtecs reported record revenue and net profit for its financial year ended 31 December 2020. Total revenue jumped nearly six-fold to US$400.3 million on the back of a global surge in demand for PPE following COVID-19, while net profit soared to US$131.7 million from US$1.2 million a year earlier.   
Looking ahead, Medtecs will continue to focus on rolling out proprietary products to meet customer needs. It already produces its own CoverU brand of PPE products. This year, it launched Medtecs Shield, a new line of antiviral offerings that includes masks, mobile phone cases and sprays, all of which are integrated with nanotechnologies that can kill viruses and bacteria.  
“We believe these products are essential for everyone, not just healthcare workers, in the current pandemic environment,” Yang added.  
Apart from offline channels like convenience shops and department stores, the Group also leverages major e-commerce sites such as Alibaba and Amazon to sell its PPE range. “We’re also looking to set up distribution channels across North America, Japan and Europe to extend the reach of our products.”  Fortifying Its Position  
While demand remains robust, challenges loom, not the least of which are the US-China trade spat and the ongoing pandemic, Yang pointed out.  
“US-China trade tensions continue to threaten a supply chain that is already weakened by COVID-19, and in order to mitigate the impact, Medtecs will continue to work with like-minded partners to tap synergies,” he added.  
The Group has established a series of strategic partnerships in recent months to ensure its supply chains remain protected and undisrupted.   
To deliver sustainable business growth, Medtecs has doubled up on its engagements with group purchasing organisations, institutional clients and government agencies to offer its PPE stockpiling services. As a result, it has secured several supply contracts in the Philippines and Cambodia for the first quarter ended 31 March 2021.   
“We’ve started site selection for the construction of an additional PPE manufacturing facility to fortify our position as a leading PPE stockpiling provider,” Yang noted.  
“We’re also focused on expanding our retail business through our Medtecs-branded products, as well as leveraging e-commerce to widen our customer reach and build brand awareness.”  
According to a recently published report by Research Dive, the global PPE market was valued at US$43.9 billion in 2018 and is anticipated to surge to US$93.5 billion by 2026, expanding at a compound annual growth rate (CAGR) of 10%. Currently, the market is worth approximately US$51.8 billion, as demand continues to rise.  
Apart from adopting multiple countermeasures to ensure business continuity and boost sales, Medtecs has also identified new Environmental, Social and Corporate Governance (ESG) factors to manage. They include quality control, product labelling and responsibility, labour relations, employee training, as well as waste management.  Reducing PPE Waste  
“One of the challenges we faced recently in implementing our ESG strategy was how to strike the right balance between protecting people from COVID-19 and conserving the environment,” Yang noted.  
To minimise the environmental impact associated with high volumes of single-use PPE due to the on-going pandemic, Medtecs’s R&amp;D team began working with partners and experimenting with different materials to create solutions to reduce PPE waste.   
“As a result, we developed the Weekly Disposable Anti-Viral Masks as part of our Medtecs Shield Collection. These masks can be worn up to seven days, odour-free, which allows wearers to simultaneously protect themselves from pathogens while caring for the environment through reduced wastage.”  
Undoubtedly, there is much to keep Yang up till the wee hours. “To be honest, I have not slept well since the outbreak of COVID-19 in early 2020,” he admitted.  
“Back in April last year, when the pandemic was nearing its peak, there was a severe global shortage of PPE and we were inundated with thousands of requests for our products from all over the world,” he recalled.  
“I worked super long hours, but couldn’t fall asleep when it was time for bed because the images of frontline workers wearing makeshift PPE, or none at all, haunted me. I would lie in bed thinking of ways to mobilise our resources and manpower, to get as many of these critical protective gear into our customers’ hands in as short a time as possible.”  
To de-stress, the 39-year-old plays Go or weiqi - a Chinese abstract strategy board game - with his sons, aged six and eight.  
“I’ve been playing Go since I was six - it’s a life-long passion of mine. It’s like an exercise for the brain, but at the same time, it takes my mind off work, so I feel more relaxed,” he said with a laugh.  
For his children, he has this advice: “Dream big, dream bold, and never settle for less than what you deserve”.   
“I’m not what you might call a tiger or a helicopter parent. In fact, I’m hands off when it comes to their school work, and I don’t demand perfect scores,” he said.  
“But I always emphasise the importance of believing in yourself and giving your best in whatever you do. If you fail at something, but you’ve already given 100%, then you’re good in my book.”  Medtecs International Corporation Ltd  
Medtecs is a leading personal protective equipment (PPE) and hospital services provider, with manufacturing facilities in the Philippines, Cambodia and China. The Group is a key supplier to global PPE companies, and exports to over 30 countries, including Europe, US, Southeast Asia, North Asia and Australia. As a hospital services provider, Medtecs provides hospitals in Taiwan and the Philippines with integrated services that include rental and laundry of linens, management of laundry facilities, hospital automation, as well as procurement solutions for PPE and medical devices needs. The Group was listed on the then Sesdaq board in 1999 and transitioned to SGX Catalist in 2010. Its Taiwan Depository Receipts (TDRs) have been listed on the Taiwan Stock Exchange (TWSE) since 2002.  
The company website is: www.medtecs.com  
Click here for the company's StockFacts page.  
For the six months ended 30 June 2021 financial results, click here.  
 

About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic Photo: Company file  kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.  
For previous editions of kopi-C: the Company brew, please click here.    
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to jennifer.t@sgx.com.



Medtecs Builds Resilience for Sustainable Growth

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