Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Equity Bottom-Up

UG Healthcare is a Malaysia based glove manufacturer which listed on Catalist in Dec-2014. The company manufactures and sells natural latex and nitrile examination gloves, along with distributing ancillary products.&nbsp;While recent results showed a decline in revenue and profit, however, longer term prospects remain good, given:<ul><li>IPO proceeds will be used to expand capacity by 46% by July 2015, impact on growth will be felt in FY16 (Jul-2015 to Jun-2016) </li><li>Company has been ramping up sales effort in order to be able to capitalise on the upcoming additional capacity. This has led to upfront increase in sales costs, which should normalise when revenues from new capacity flow in </li><li>Given that over 75% of sales are to developed markets, MYR weakness could provide additional kicker to margins </li><li>Valuations remain cheap with the stock trading at 10x FY15 and 6.6-7.5x FY16 p/e </li></ul>

UG Healthcare is a Malaysia based glove manufacturer which listed on Catalist in Dec-2014. The company manufactures and sells natural latex and nitrile examination gloves, along with distributing ancillary products.&nbsp;While recent results showed a decline in revenue and profit, however, longer term prospects remain good, given:IPO proceeds will be used to expand capacity by 46% by July 2015, impact on growth will be felt in FY16 (Jul-2015 to Jun-2016) Company has been ramping up sales effort in order to be able to capitalise on the upcoming additional capacity. This has led to upfront increase in sales costs, which should normalise when revenues from new capacity flow in Given that over 75% of sales are to developed markets, MYR weakness could provide additional kicker to margins Valuations remain cheap with the stock trading at 10x FY15 and 6.6-7.5x FY16 p/e 

UG Healthcare (UGHC SP) - New capacity addition will kick start growth from Jul-15

Founder of Innovation Research & Advisory firm, Lightbulb Capital

Daniel Liebau

Founder of Innovation Research & Advisory firm

Lightbulb Capital

Thematic (Sector/Industry)

Companies across different industries are building Innovation centers&nbsp; in Singapore, Hong Kong and other cities across Asia and the rest of the world.&nbsp; Some examples include <a target="_blank" href="http://aia-accelerator.com/">AIA</a>, <a target="_blank" href="http://www.3m.com.hk/intl/hk/english/in_hongkong/innovation_center.html">3M</a>, <a target="_blank" href="http://www.mis-asia.com/tech/industries/metlife-announces-futurelab-in-singapore/">MetLife</a> and <a target="_blank" href="https://www.edb.gov.sg/content/edb/en/news-and-events/news/2014-news/p-and-g-opens-250-million-innovation-centre.html">P&amp;G</a> amongst others.&nbsp;While this is a good step in the right direction there are 4 specific points that are worth considering to gauge if the initiative has a chance to create some optionality for future long term growth. Therefore, from an investment perspective it makes sense to evaluate Innovation initiatives in target companies with those points in mind.

Companies across different industries are building Innovation centers&nbsp; in Singapore, Hong Kong and other cities across Asia and the rest of the world.&nbsp;  Some examples include AIA, 3M, MetLife and P&amp;G amongst others.&nbsp;While this is a good step in the right direction there are 4 specific points that are worth considering to gauge if the initiative has a chance to create some optionality for future long term growth. Therefore, from an investment perspective it makes sense to evaluate Innovation initiatives in target companies with those points in mind. 

Can Innovation labs be assessed to pick stocks for your portfolio?

Singapore

UG Healthcare Corporation Limited operates as a medical supply company. The Company manufactures and distributes surgical, vinyl and cleanroom gloves, face masks, and other medical disposables.

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UG Healthcare (UGHC SP)