Medtecs Intl    Last:0.123   -

Medtecs

Errr... Best World is a different story. There were related party transactions involved.   

iinvestor      ( Date: 21-Jun-2020 16:02) Posted: commendable analysis to justify high prices..P/E 15 is too high for me...a lot of forward pricing assumptions. This reminds me of Best World...profits forecast keep revising until one day everything crash. Beware..not for core holdings.

 

commendable analysis to justify high prices..P/E 15 is too high for me...a lot of forward pricing assumptions.

This reminds me of Best World...profits forecast keep revising until one day everything crash.

Beware..not for core holdings.

 

Bro, very good and detailed covering.
Reasonable projections of earnings and PE.
TP definitely achieveable. Hold till coming results as always. Thanks!

 

Quality_Invest      ( Date: 20-Jun-2020 23:44) Posted: I have been following this forum for the past few months and have benefited from the sharing by some experienced investors/traders here. Seeing that many people here are confused about Medtecs&rsquo recent announcement (positive event) that contrasted with the Friday&rsquo s plunge in stock price (negative event), I will share my insights here. In this post, I will be as detailed and objective as possible, covering most of the points and questions that others have shared here. ------------------------------ Fundamental Analysis According to the Medtecs&rsquo announcement on 5th May 2020, Q1 profits is US$3.672 million and Q2 profits is higher than Q1. In the follow-up announcement on 18th June 2020 (Thursday), it was mentioned that profits in the second half of 2020 will be AT LEAST on par with profits in the first half of 2020. To calculate the full year profits, we need to know Q2 profits, which was not provided. In this case, I will use the information we have on hand, which is that Covid-19 only started spreading globally starting middle of February (half-way into Q1). Hence, we can reasonably assume that Q2 profits will be 50% higher than Q1. With the above information, we can derive the following: Q1 profits: US$3.672M Q2 profits: US$5.508M (50% higher) Q3 & Q4 profits: US$9.18M (at least on par with first half)   Full year 2020 profits = US$18.36M = S$25.7M (exchange rate of 1:1.4) Given that Medtecs has about 550million shares, Earnings Per Share (EPS) will be S$0.0467. If we use the average PE Ratio of 15, multiplied by EPS, the value of the stock price should be S$0.70. Given that investors around the world are highly bullish about the medical sector, PE ratio can easily be higher than the average of 15, which means the value of the stock price can go even higher than S$0.70. Current stock price is only $0.295.   However, one point which many people here missed out in their calculations is that investors do not just look at one year&rsquo s profits to determine the value of the company. Hence, we have to make some predictions for 2021 at the very least. Medtecs&rsquo sales are expected to drop next year, since this year is a black swan event. However, given that (1) the high infectability of the Covid-19 virus where total number of cases worldwide continue to break record highs, (2) vaccines are not expected to be readily ready until at least start of next year and (3) governments and organisations around the world will want to stockpile on medical supplies after learning their lessons the hard way, we can safely assume that Medtecs&rsquo sales will still be decent. Assuming a 50% drop in sales next year, EPS will be S$0.023. Take 2020 and 2021&rsquo s combined EPS and divide it by 2 years, multiply by PE ratio of 15, the short-term fundamental value of the stock will be S$0.522 (78% gain from current stock price).   For those long-term investors, you might ask, what happens after 2 years? For 2020 and 2021, Medtecs as a company would have earned unprecedented profits, running in the tens of millions of dollars as calculated earlier. A good management would use this money to expand in future growth areas so that even after the Covid-19 has been completely eradicated, future revenue and profits will continue to be much higher than what it achieved in the past.   In summary, Thursday&rsquo s announcement is actually very positive as we are only in the middle of June, but the company is already confident to announce that profits from second half of the year will be AT LEAST on par with profits from first half of the year.   Question: If Thursday&rsquo s announcement is very positive, why did Medtecs share price plunge on Friday late afternoon? I offer two possible explanations: First, as we all know, markets are not always rational. Many people buy and sell company shares without proper knowledge or homework, but based on their feelings and sentiments. These people can be easily taken advantage of by real investors/traders who have done their homework. This leads me to the second explanation.   The second explanation is that Friday&rsquo s movement is manipulated to flush out contra players, people who bought the company shares without doing their homework, as well as people who sold the shares based on fear. Senior Executives or seasoned investors will know that most companies&rsquo AGM is merely a formality to pass down resolutions and re-appoint directors for the next year. No one is expecting new information or surprise announcements that can significantly affect a stock&rsquo s price. Medtecs&rsquo AGM on Friday is no different. Resolutions were passed, directors were re-appointed, and it ended without fanfare. However, just within minutes after the AGM ended, more than 10 million shares were intentionally thrown down, causing the stock price to drop from S$0.32 to S$0.295. This sparked panic in many of the weak holders that I mentioned earlier, causing more to sell and others to cut loss. Legit investors would have never dumped their shares immediately after an AGM ended where nothing fancy is expected in the first place. Such a move is highly likely to be pre-mediated with the intention to earn by shorting, and quickly buying back even more shares from people who sold in a panic to prepare for an even bigger rise down the road. Friday&rsquo s afternoon movement has nothing to do with the company&rsquo s fundamentals and positive news that was announced earlier. For those who believe in the company&rsquo s fundamentals, it can be a good opportunity to buy.   ------------------------------ Macro-outlook Although many people may think that Covid-19 is coming under control with economies re-opening, truth is that the number of Covid-19 cases worldwide has continued to break record highs ( Link here: https://www.worldometers.info/coronavirus/worldwide-graphs/#daily-cases ) and new regions are becoming emerging hotspots. With this backdrop, medical supplies will continue to be in high demand by governments, organisations and hospitals worldwide. And this is to keep in mind that stockpiling of medical supplies for the future has barely begun in many countries. Hence, we can expect Medtecs business to remain blooming for at least until second half of 2021.     Other Questions Medtecs is going to face increased competition from new companies starting to produce masks and PPE. How is this going to affect the company? Governments, organisations (e.g. World Health Organisation) and hospitals will be the main people buying PPE and they would most definitely want to buy from trusted sources, not some random company who just started operations 6 months ago and may close down anytime. In this regard, Medtecs benefit from its brand and credibility, as it has been operating for more than 30 years. As shared in their Thursday&rsquo s announcement, Medtecs is &ldquo the preferred trading partner and supplier by international buyers, who have praised our products for quality&rdquo .   Summary Covid-19 has negatively impacted most industries and companies around the globe, and its impact is expected to continue for at least the next 1-2 years. The Medical sector on the other hand, is one of the rare few which has benefited greatly from it. Although most other companies in the Medical sector are already seeing rich valuations in their stock prices, Medtecs Intl remains undervalued with a Fundamental value of S$0.520 as compared to its current stock price at S$0.295. Medtecs Intl' s management has also expressed willingness to consider paying out dividends from its bumper profits. Combined with the backdrop that many investors are looking to invest in sectors that can benefit from this outbreak, especially when stock market indexes worldwide are already at pre-Covid 19 levels, Medtecs Intl is a rare gem and should see its stock price continue to break record highs in the very near term. ------------------------------ Hope the above insights help everyone here in making your decision on Medtecs next week! 😊 Full article linked here:  https://flyinginvest.wixsite.com/mysite/post/sgx-546-si-medtecs-intl

 

Poems restricted the buy side on Medtec. You have to call your broker to place an order.

hobbes12      ( Date: 21-Jun-2020 13:25) Posted: On the Phliilips Poems pkatform, medtecs is a restricted counter. How to buy this using poems?

 

Good analysis though I think (a) a lot has been priced in, (b) the numbers are still projections/estimates. I think in the short term (1-3 weeks) unless BB wants to continue to fry up OR medical bull continues, if you ask me honestly I think it will trend down. Alot of buying last week might be contras from Thu/Fri you will see the sales from wed-fri next week on esp if they cannot hold.

The Next Catalyst as everyone said is Aug results. I think possibly if analyst coverage might cause a spike, anyone has a analyst friend?

 

On the Phliilips Poems pkatform, medtecs is a restricted counter. How to buy this using poems?

 

Well said, Investor8. There are a few of us here that are convinced that Medtec is an undervalued company at current share price. How it moves forward is anybody guess. It may fly, it may trade sideways, it may just plunges lower to kill off short term players, whatever.
My best bet is always on fundamental analysis. I always make a profit from FA. I take pride if I got it right with my investment from FA. Needless to say, I just say it is luck if ever I make a profit from TA. I may stay on a stock based on SA, however. There are a few of us here who concur that Medtec is undervalued. Let us ride this.

 

I believe the price may drift, possibly upwards (but not chiong), from now until end July. Then the up movement may accelerate a bit more before Q2 result announcement. But unlike the "buy on rumours and sell on news" syndrome, we may see a big positive reaction if actual results exceed the 50% increase from Q1 that many are expecting/hoping. I personally think that company is likely to register a net profit figure between USD6M to USD8m for Q2.

 

Bravo, very good and detail post. Let me add. The announcement in 5 May which informed us that Q2 sales and profits is going to be better than Q1 is indicative that even before Q2 numbers are in, directors are very confident that it top and bottom line are going to be more than Q1. Moreover, with the profit margins getting wider, this bodes well for the upcoming Q2 results which would be announced in August. The main question is how much better will the Q2 results be. Forumer, Quality_Invest, assumption of 50% more is to me reasonable.
However, buyers beware, all this estimation and prediction is already out, the price might just run up before the Q2 results.

Quality_Invest      ( Date: 20-Jun-2020 23:44) Posted: I have been following this forum for the past few months and have benefited from the sharing by some experienced investors/traders here. Seeing that many people here are confused about Medtecs&rsquo recent announcement (positive event) that contrasted with the Friday&rsquo s plunge in stock price (negative event), I will share my insights here. In this post, I will be as detailed and objective as possible, covering most of the points and questions that others have shared here. ------------------------------ Fundamental Analysis According to the Medtecs&rsquo announcement on 5th May 2020, Q1 profits is US$3.672 million and Q2 profits is higher than Q1. In the follow-up announcement on 18th June 2020 (Thursday), it was mentioned that profits in the second half of 2020 will be AT LEAST on par with profits in the first half of 2020. To calculate the full year profits, we need to know Q2 profits, which was not provided. In this case, I will use the information we have on hand, which is that Covid-19 only started spreading globally starting middle of February (half-way into Q1). Hence, we can reasonably assume that Q2 profits will be 50% higher than Q1. With the above information, we can derive the following: Q1 profits: US$3.672M Q2 profits: US$5.508M (50% higher) Q3 & Q4 profits: US$9.18M (at least on par with first half)   Full year 2020 profits = US$18.36M = S$25.7M (exchange rate of 1:1.4) Given that Medtecs has about 550million shares, Earnings Per Share (EPS) will be S$0.0467. If we use the average PE Ratio of 15, multiplied by EPS, the value of the stock price should be S$0.70. Given that investors around the world are highly bullish about the medical sector, PE ratio can easily be higher than the average of 15, which means the value of the stock price can go even higher than S$0.70. Current stock price is only $0.295.   However, one point which many people here missed out in their calculations is that investors do not just look at one year&rsquo s profits to determine the value of the company. Hence, we have to make some predictions for 2021 at the very least. Medtecs&rsquo sales are expected to drop next year, since this year is a black swan event. However, given that (1) the high infectability of the Covid-19 virus where total number of cases worldwide continue to break record highs, (2) vaccines are not expected to be readily ready until at least start of next year and (3) governments and organisations around the world will want to stockpile on medical supplies after learning their lessons the hard way, we can safely assume that Medtecs&rsquo sales will still be decent. Assuming a 50% drop in sales next year, EPS will be S$0.023. Take 2020 and 2021&rsquo s combined EPS and divide it by 2 years, multiply by PE ratio of 15, the short-term fundamental value of the stock will be S$0.522 (78% gain from current stock price).   For those long-term investors, you might ask, what happens after 2 years? For 2020 and 2021, Medtecs as a company would have earned unprecedented profits, running in the tens of millions of dollars as calculated earlier. A good management would use this money to expand in future growth areas so that even after the Covid-19 has been completely eradicated, future revenue and profits will continue to be much higher than what it achieved in the past.   In summary, Thursday&rsquo s announcement is actually very positive as we are only in the middle of June, but the company is already confident to announce that profits from second half of the year will be AT LEAST on par with profits from first half of the year.   Question: If Thursday&rsquo s announcement is very positive, why did Medtecs share price plunge on Friday late afternoon? I offer two possible explanations: First, as we all know, markets are not always rational. Many people buy and sell company shares without proper knowledge or homework, but based on their feelings and sentiments. These people can be easily taken advantage of by real investors/traders who have done their homework. This leads me to the second explanation.   The second explanation is that Friday&rsquo s movement is manipulated to flush out contra players, people who bought the company shares without doing their homework, as well as people who sold the shares based on fear. Senior Executives or seasoned investors will know that most companies&rsquo AGM is merely a formality to pass down resolutions and re-appoint directors for the next year. No one is expecting new information or surprise announcements that can significantly affect a stock&rsquo s price. Medtecs&rsquo AGM on Friday is no different. Resolutions were passed, directors were re-appointed, and it ended without fanfare. However, just within minutes after the AGM ended, more than 10 million shares were intentionally thrown down, causing the stock price to drop from S$0.32 to S$0.295. This sparked panic in many of the weak holders that I mentioned earlier, causing more to sell and others to cut loss. Legit investors would have never dumped their shares immediately after an AGM ended where nothing fancy is expected in the first place. Such a move is highly likely to be pre-mediated with the intention to earn by shorting, and quickly buying back even more shares from people who sold in a panic to prepare for an even bigger rise down the road. Friday&rsquo s afternoon movement has nothing to do with the company&rsquo s fundamentals and positive news that was announced earlier. For those who believe in the company&rsquo s fundamentals, it can be a good opportunity to buy.   ------------------------------ Macro-outlook Although many people may think that Covid-19 is coming under control with economies re-opening, truth is that the number of Covid-19 cases worldwide has continued to break record highs ( Link here: https://www.worldometers.info/coronavirus/worldwide-graphs/#daily-cases ) and new regions are becoming emerging hotspots. With this backdrop, medical supplies will continue to be in high demand by governments, organisations and hospitals worldwide. And this is to keep in mind that stockpiling of medical supplies for the future has barely begun in many countries. Hence, we can expect Medtecs business to remain blooming for at least until second half of 2021.     Other Questions Medtecs is going to face increased competition from new companies starting to produce masks and PPE. How is this going to affect the company? Governments, organisations (e.g. World Health Organisation) and hospitals will be the main people buying PPE and they would most definitely want to buy from trusted sources, not some random company who just started operations 6 months ago and may close down anytime. In this regard, Medtecs benefit from its brand and credibility, as it has been operating for more than 30 years. As shared in their Thursday&rsquo s announcement, Medtecs is &ldquo the preferred trading partner and supplier by international buyers, who have praised our products for quality&rdquo .   Summary Covid-19 has negatively impacted most industries and companies around the globe, and its impact is expected to continue for at least the next 1-2 years. The Medical sector on the other hand, is one of the rare few which has benefited greatly from it. Although most other companies in the Medical sector are already seeing rich valuations in their stock prices, Medtecs Intl remains undervalued with a Fundamental value of S$0.520 as compared to its current stock price at S$0.295. Medtecs Intl' s management has also expressed willingness to consider paying out dividends from its bumper profits. Combined with the backdrop that many investors are looking to invest in sectors that can benefit from this outbreak, especially when stock market indexes worldwide are already at pre-Covid 19 levels, Medtecs Intl is a rare gem and should see its stock price continue to break record highs in the very near term. ------------------------------ Hope the above insights help everyone here in making your decision on Medtecs next week! 😊 Full article linked here:  https://flyinginvest.wixsite.com/mysite/post/sgx-546-si-medtecs-intl

 

Oh. I have overestimated the impact of the below analysis anyway. It appears the market is always full of irrational investors, traders, young investors without knowledge.

I invest based on fundamental, technical, but importantly, the foresight. My foresight tell me I am pleased now. Cheers.

chiachiawee      ( Date: 21-Jun-2020 00:39) Posted: Hi bro, very good analysis backed by good research. However, I am not very ' pleased' by your detailed analysis.  Reason because the market needs the banwagoners, the short seller who short without thinking, the short term traders to trades and CL when tide goes against them, and the newbies purely follow without doing homework. Your detail analysis has put the long term investors at disadvantage (I' m one of them who hold the batch at 0.1x), that since all the strong fundamentals were exposed in your below analysis, the BBs might not be interested to do the flush and the extreme push anymore. There will be less volatility in this counter to achieve a higher growth. Do consider next time to keep the analysis at your own. You don' t have the incentive to do it here anyway. People needs to learn their way up.  Nevertheless, good analysis.  Quality_Invest      ( Date: 20-Jun-2020 23:44) Posted: I have been following this forum for the past few months and have benefited from the sharing by some experienced investors/traders here. Seeing that many people here are confused about Medtecs&rsquo recent announcement (positive event) that contrasted with the Friday&rsquo s plunge in stock price (negative event), I will share my insights here. In this post, I will be as detailed and objective as possible, covering most of the points and questions that others have shared here. ------------------------------ Fundamental Analysis According to the Medtecs&rsquo announcement on 5th May 2020, Q1 profits is US$3.672 million and Q2 profits is higher than Q1. In the follow-up announcement on 18th June 2020 (Thursday), it was mentioned that profits in the second half of 2020 will be AT LEAST on par with profits in the first half of 2020. To calculate the full year profits, we need to know Q2 profits, which was not provided. In this case, I will use the information we have on hand, which is that Covid-19 only started spreading globally starting middle of February (half-way into Q1). Hence, we can reasonably assume that Q2 profits will be 50% higher than Q1. With the above information, we can derive the following: Q1 profits: US$3.672M Q2 profits: US$5.508M (50% higher) Q3 & Q4 profits: US$9.18M (at least on par with first half)   Full year 2020 profits = US$18.36M = S$25.7M (exchange rate of 1:1.4) Given that Medtecs has about 550million shares, Earnings Per Share (EPS) will be S$0.0467. If we use the average PE Ratio of 15, multiplied by EPS, the value of the stock price should be S$0.70. Given that investors around the world are highly bullish about the medical sector, PE ratio can easily be higher than the average of 15, which means the value of the stock price can go even higher than S$0.70. Current stock price is only $0.295.   However, one point which many people here missed out in their calculations is that investors do not just look at one year&rsquo s profits to determine the value of the company. Hence, we have to make some predictions for 2021 at the very least. Medtecs&rsquo sales are expected to drop next year, since this year is a black swan event. However, given that (1) the high infectability of the Covid-19 virus where total number of cases worldwide continue to break record highs, (2) vaccines are not expected to be readily ready until at least start of next year and (3) governments and organisations around the world will want to stockpile on medical supplies after learning their lessons the hard way, we can safely assume that Medtecs&rsquo sales will still be decent. Assuming a 50% drop in sales next year, EPS will be S$0.023. Take 2020 and 2021&rsquo s combined EPS and divide it by 2 years, multiply by PE ratio of 15, the short-term fundamental value of the stock will be S$0.522 (78% gain from current stock price).   For those long-term investors, you might ask, what happens after 2 years? For 2020 and 2021, Medtecs as a company would have earned unprecedented profits, running in the tens of millions of dollars as calculated earlier. A good management would use this money to expand in future growth areas so that even after the Covid-19 has been completely eradicated, future revenue and profits will continue to be much higher than what it achieved in the past.   In summary, Thursday&rsquo s announcement is actually very positive as we are only in the middle of June, but the company is already confident to announce that profits from second half of the year will be AT LEAST on par with profits from first half of the year.   Question: If Thursday&rsquo s announcement is very positive, why did Medtecs share price plunge on Friday late afternoon? I offer two possible explanations: First, as we all know, markets are not always rational. Many people buy and sell company shares without proper knowledge or homework, but based on their feelings and sentiments. These people can be easily taken advantage of by real investors/traders who have done their homework. This leads me to the second explanation.   The second explanation is that Friday&rsquo s movement is manipulated to flush out contra players, people who bought the company shares without doing their homework, as well as people who sold the shares based on fear. Senior Executives or seasoned investors will know that most companies&rsquo AGM is merely a formality to pass down resolutions and re-appoint directors for the next year. No one is expecting new information or surprise announcements that can significantly affect a stock&rsquo s price. Medtecs&rsquo AGM on Friday is no different. Resolutions were passed, directors were re-appointed, and it ended without fanfare. However, just within minutes after the AGM ended, more than 10 million shares were intentionally thrown down, causing the stock price to drop from S$0.32 to S$0.295. This sparked panic in many of the weak holders that I mentioned earlier, causing more to sell and others to cut loss. Legit investors would have never dumped their shares immediately after an AGM ended where nothing fancy is expected in the first place. Such a move is highly likely to be pre-mediated with the intention to earn by shorting, and quickly buying back even more shares from people who sold in a panic to prepare for an even bigger rise down the road. Friday&rsquo s afternoon movement has nothing to do with the company&rsquo s fundamentals and positive news that was announced earlier. For those who believe in the company&rsquo s fundamentals, it can be a good opportunity to buy.   ------------------------------ Macro-outlook Although many people may think that Covid-19 is coming under control with economies re-opening, truth is that the number of Covid-19 cases worldwide has continued to break record highs ( Link here: https://www.worldometers.info/coronavirus/worldwide-graphs/#daily-cases ) and new regions are becoming emerging hotspots. With this backdrop, medical supplies will continue to be in high demand by governments, organisations and hospitals worldwide. And this is to keep in mind that stockpiling of medical supplies for the future has barely begun in many countries. Hence, we can expect Medtecs business to remain blooming for at least until second half of 2021.     Other Questions Medtecs is going to face increased competition from new companies starting to produce masks and PPE. How is this going to affect the company? Governments, organisations (e.g. World Health Organisation) and hospitals will be the main people buying PPE and they would most definitely want to buy from trusted sources, not some random company who just started operations 6 months ago and may close down anytime. In this regard, Medtecs benefit from its brand and credibility, as it has been operating for more than 30 years. As shared in their Thursday&rsquo s announcement, Medtecs is &ldquo the preferred trading partner and supplier by international buyers, who have praised our products for quality&rdquo .   Summary Covid-19 has negatively impacted most industries and companies around the globe, and its impact is expected to continue for at least the next 1-2 years. The Medical sector on the other hand, is one of the rare few which has benefited greatly from it. Although most other companies in the Medical sector are already seeing rich valuations in their stock prices, Medtecs Intl remains undervalued with a Fundamental value of S$0.520 as compared to its current stock price at S$0.295. Medtecs Intl' s management has also expressed willingness to consider paying out dividends from its bumper profits. Combined with the backdrop that many investors are looking to invest in sectors that can benefit from this outbreak, especially when stock market indexes worldwide are already at pre-Covid 19 levels, Medtecs Intl is a rare gem and should see its stock price continue to break record highs in the very near term. ------------------------------ Hope the above insights help everyone here in making your decision on Medtecs next week! 😊 Full article linked here:  https://flyinginvest.wixsite.com/mysite/post/sgx-546-si-medtecs-intl

 

Just hope Medtecs will touch 50Cents then all the investors here happy and aim another counter. Keep roll up our fortune!
 

 

I agree with you on medical advances/technology today vs 150 years ago. So mortality rate will definitely be lower. But PPEs are part of the measures deployed to control the spread. So Medtecs will definitely be a beneficiary if the 2nd wave hits hard.

Alvin2042      ( Date: 21-Jun-2020 12:17) Posted: We cannot really cannot compared the period Spanish flu and current covid-19 pandemic. Medical are well advance now, and many researches on treatments n vaccines are well underway. But I do fear for those poor and less advance countries especially in americas and Africa. We are now currently in the situation where most European countries have the covid under control. Even in US n Germany where there might be a 2nd wave, the new cases do not correspond with death rate. Just see the US chart u will see new Covid cases resume an upward trend, but daily death continue to show a downtrend. Investor8      ( Date: 21-Jun-2020 12:02) Posted: Just for perspective, the 2nd wave of the Spanish flu was much worse that the first.

 

Yes. It provides good insight with sound analysis. Medical stocks are hot now and if they are listed in US, the share price would have been great. But unfortunately, it is listed here.

Just my personal view.

hokpin      ( Date: 21-Jun-2020 11:20) Posted: A good in depth analysis! Shorties who want to sell, we just ' hop' (pick). Any price below 0.30, is a good entry price to accumulate. 2 months later till Aug 2020, we will be the one who will laugh till the last!!! Quality_Invest      ( Date: 20-Jun-2020 23:44) Posted: I have been following this forum for the past few months and have benefited from the sharing by some experienced investors/traders here. Seeing that many people here are confused about Medtecs&rsquo recent announcement (positive event) that contrasted with the Friday&rsquo s plunge in stock price (negative event), I will share my insights here. In this post, I will be as detailed and objective as possible, covering most of the points and questions that others have shared here. ------------------------------ Fundamental Analysis According to the Medtecs&rsquo announcement on 5th May 2020, Q1 profits is US$3.672 million and Q2 profits is higher than Q1. In the follow-up announcement on 18th June 2020 (Thursday), it was mentioned that profits in the second half of 2020 will be AT LEAST on par with profits in the first half of 2020. To calculate the full year profits, we need to know Q2 profits, which was not provided. In this case, I will use the information we have on hand, which is that Covid-19 only started spreading globally starting middle of February (half-way into Q1). Hence, we can reasonably assume that Q2 profits will be 50% higher than Q1. With the above information, we can derive the following: Q1 profits: US$3.672M Q2 profits: US$5.508M (50% higher) Q3 & Q4 profits: US$9.18M (at least on par with first half)   Full year 2020 profits = US$18.36M = S$25.7M (exchange rate of 1:1.4) Given that Medtecs has about 550million shares, Earnings Per Share (EPS) will be S$0.0467. If we use the average PE Ratio of 15, multiplied by EPS, the value of the stock price should be S$0.70. Given that investors around the world are highly bullish about the medical sector, PE ratio can easily be higher than the average of 15, which means the value of the stock price can go even higher than S$0.70. Current stock price is only $0.295.   However, one point which many people here missed out in their calculations is that investors do not just look at one year&rsquo s profits to determine the value of the company. Hence, we have to make some predictions for 2021 at the very least. Medtecs&rsquo sales are expected to drop next year, since this year is a black swan event. However, given that (1) the high infectability of the Covid-19 virus where total number of cases worldwide continue to break record highs, (2) vaccines are not expected to be readily ready until at least start of next year and (3) governments and organisations around the world will want to stockpile on medical supplies after learning their lessons the hard way, we can safely assume that Medtecs&rsquo sales will still be decent. Assuming a 50% drop in sales next year, EPS will be S$0.023. Take 2020 and 2021&rsquo s combined EPS and divide it by 2 years, multiply by PE ratio of 15, the short-term fundamental value of the stock will be S$0.522 (78% gain from current stock price).   For those long-term investors, you might ask, what happens after 2 years? For 2020 and 2021, Medtecs as a company would have earned unprecedented profits, running in the tens of millions of dollars as calculated earlier. A good management would use this money to expand in future growth areas so that even after the Covid-19 has been completely eradicated, future revenue and profits will continue to be much higher than what it achieved in the past.   In summary, Thursday&rsquo s announcement is actually very positive as we are only in the middle of June, but the company is already confident to announce that profits from second half of the year will be AT LEAST on par with profits from first half of the year.   Question: If Thursday&rsquo s announcement is very positive, why did Medtecs share price plunge on Friday late afternoon? I offer two possible explanations: First, as we all know, markets are not always rational. Many people buy and sell company shares without proper knowledge or homework, but based on their feelings and sentiments. These people can be easily taken advantage of by real investors/traders who have done their homework. This leads me to the second explanation.   The second explanation is that Friday&rsquo s movement is manipulated to flush out contra players, people who bought the company shares without doing their homework, as well as people who sold the shares based on fear. Senior Executives or seasoned investors will know that most companies&rsquo AGM is merely a formality to pass down resolutions and re-appoint directors for the next year. No one is expecting new information or surprise announcements that can significantly affect a stock&rsquo s price. Medtecs&rsquo AGM on Friday is no different. Resolutions were passed, directors were re-appointed, and it ended without fanfare. However, just within minutes after the AGM ended, more than 10 million shares were intentionally thrown down, causing the stock price to drop from S$0.32 to S$0.295. This sparked panic in many of the weak holders that I mentioned earlier, causing more to sell and others to cut loss. Legit investors would have never dumped their shares immediately after an AGM ended where nothing fancy is expected in the first place. Such a move is highly likely to be pre-mediated with the intention to earn by shorting, and quickly buying back even more shares from people who sold in a panic to prepare for an even bigger rise down the road. Friday&rsquo s afternoon movement has nothing to do with the company&rsquo s fundamentals and positive news that was announced earlier. For those who believe in the company&rsquo s fundamentals, it can be a good opportunity to buy.   ------------------------------ Macro-outlook Although many people may think that Covid-19 is coming under control with economies re-opening, truth is that the number of Covid-19 cases worldwide has continued to break record highs ( Link here: https://www.worldometers.info/coronavirus/worldwide-graphs/#daily-cases ) and new regions are becoming emerging hotspots. With this backdrop, medical supplies will continue to be in high demand by governments, organisations and hospitals worldwide. And this is to keep in mind that stockpiling of medical supplies for the future has barely begun in many countries. Hence, we can expect Medtecs business to remain blooming for at least until second half of 2021.     Other Questions Medtecs is going to face increased competition from new companies starting to produce masks and PPE. How is this going to affect the company? Governments, organisations (e.g. World Health Organisation) and hospitals will be the main people buying PPE and they would most definitely want to buy from trusted sources, not some random company who just started operations 6 months ago and may close down anytime. In this regard, Medtecs benefit from its brand and credibility, as it has been operating for more than 30 years. As shared in their Thursday&rsquo s announcement, Medtecs is &ldquo the preferred trading partner and supplier by international buyers, who have praised our products for quality&rdquo .   Summary Covid-19 has negatively impacted most industries and companies around the globe, and its impact is expected to continue for at least the next 1-2 years. The Medical sector on the other hand, is one of the rare few which has benefited greatly from it. Although most other companies in the Medical sector are already seeing rich valuations in their stock prices, Medtecs Intl remains undervalued with a Fundamental value of S$0.520 as compared to its current stock price at S$0.295. Medtecs Intl' s management has also expressed willingness to consider paying out dividends from its bumper profits. Combined with the backdrop that many investors are looking to invest in sectors that can benefit from this outbreak, especially when stock market indexes worldwide are already at pre-Covid 19 levels, Medtecs Intl is a rare gem and should see its stock price continue to break record highs in the very near term. ------------------------------ Hope the above insights help everyone here in making your decision on Medtecs next week! 😊 Full article linked here:  https://flyinginvest.wixsite.com/mysite/post/sgx-546-si-medtecs-intl

 

Your calculation is decent. Nice.

I am just disturbed by the overly estimated and valuation of 15x pe.
That's all.

Investor8      ( Date: 21-Jun-2020 12:13) Posted: I don't think the statement "anyhow estimate one" is fair. Even if we assume Q2 earnings to be the same as Q1 (which is already underestimated because company said Q2 better than Q1), then H1 will be USD3.672m x 2 = USD7.344m. And if H2 is at least on par with H1, then we have whole year USD7.344m x 2 = USD14.688m or EPS of USD0.02675 which is equivalent to SGD0.03746. If you still feel that this figure is overestimated, then I really have nothing else to add. At 10x PER of the lowest possible EPS estimate of SGD0.03746, share price would work out to 37.5c. shadow11      ( Date: 21-Jun-2020 11:08) Posted: They merely said second quarter ending 30 June 2020 to exceed that of 1Q 2020. They did not say 2nd profit is 50% up of 1Q2020. EPs 0.467 is anyhow estimated one.

 

We cannot really cannot compared the period Spanish flu and current covid-19 pandemic. Medical are well advance now, and many researches on treatments n vaccines are well underway. But I do fear for those poor and less advance countries especially in americas and Africa.
We are now currently in the situation where most European countries have the covid under control. Even in US n Germany where there might be a 2nd wave, the new cases do not correspond with death rate. Just see the US chart u will see new Covid cases resume an upward trend, but daily death continue to show a downtrend.

Investor8      ( Date: 21-Jun-2020 12:02) Posted: Just for perspective, the 2nd wave of the Spanish flu was much worse that the first. furnaces      ( Date: 21-Jun-2020 11:11) Posted: Pretty self-explanatory chart on the Daily New Covid-19 cases below. Re-opening of the economies gave people the false illusion that the virus is under control but the spread is in fact accelerating. https://www.worldometers.info/coronavirus/

 

I don't think the statement "anyhow estimate one" is fair. Even if we assume Q2 earnings to be the same as Q1 (which is already underestimated because company said Q2 better than Q1), then H1 will be USD3.672m x 2 = USD7.344m. And if H2 is at least on par with H1, then we have whole year USD7.344m x 2 = USD14.688m or EPS of USD0.02675 which is equivalent to SGD0.03746. If you still feel that this figure is overestimated, then I really have nothing else to add. At 10x PER of the lowest possible EPS estimate of SGD0.03746, share price would work out to 37.5c.

shadow11      ( Date: 21-Jun-2020 11:08) Posted: They merely said second quarter ending 30 June 2020 to exceed that of 1Q 2020. They did not say 2nd profit is 50% up of 1Q2020. EPs 0.467 is anyhow estimated one. ssrata      ( Date: 21-Jun-2020 09:13) Posted: At eps of 0.467 even if PE for small cap medical is only 8 then price should be 37 cents and if PE is 10 then price should be around 47 cents medtecs is definitely undervalued

 

True, subsequently resurgence of the Covid-19 virus will likely be more deadly if history is a guide.

Investor8      ( Date: 21-Jun-2020 12:02) Posted: Just for perspective, the 2nd wave of the Spanish flu was much worse that the first. furnaces      ( Date: 21-Jun-2020 11:11) Posted: Pretty self-explanatory chart on the Daily New Covid-19 cases below. Re-opening of the economies gave people the false illusion that the virus is under control but the spread is in fact accelerating. https://www.worldometers.info/coronavirus/

 

Just for perspective, the 2nd wave of the Spanish flu was much worse that the first.

furnaces      ( Date: 21-Jun-2020 11:11) Posted: Pretty self-explanatory chart on the Daily New Covid-19 cases below. Re-opening of the economies gave people the false illusion that the virus is under control but the spread is in fact accelerating. https://www.worldometers.info/coronavirus/

 

Yup, nobody knows exactly how much the Q2 net profit will be. Everyone is guessing right now. But with Q1 gross profit margin at a mere 17.9%. A 17.9% increase in Average sale price will mean 100% increase over Q1 gross profit. That is not even taking into account the volume increase during Apr-Jun period. We are talking about a 2000% increase in hospital gowns to end users (hospitals) during the period. Personally I believe a 50% increase in net profit over Q1 is a gross under-estimation of what is to come. It is most likely much more.

shadow11      ( Date: 21-Jun-2020 11:08) Posted: They merely said second quarter ending 30 June 2020 to exceed that of 1Q 2020. They did not say 2nd profit is 50% up of 1Q2020. EPs 0.467 is anyhow estimated one. ssrata      ( Date: 21-Jun-2020 09:13) Posted: At eps of 0.467 even if PE for small cap medical is only 8 then price should be 37 cents and if PE is 10 then price should be around 47 cents medtecs is definitely undervalued

 

A good in depth analysis!
Shorties who want to sell, we just ' hop' (pick). Any price below 0.30, is a good entry price to accumulate. 2 months later till Aug 2020, we will be the one who will laugh till the last!!!

Quality_Invest      ( Date: 20-Jun-2020 23:44) Posted: I have been following this forum for the past few months and have benefited from the sharing by some experienced investors/traders here. Seeing that many people here are confused about Medtecs&rsquo recent announcement (positive event) that contrasted with the Friday&rsquo s plunge in stock price (negative event), I will share my insights here. In this post, I will be as detailed and objective as possible, covering most of the points and questions that others have shared here. ------------------------------ Fundamental Analysis According to the Medtecs&rsquo announcement on 5th May 2020, Q1 profits is US$3.672 million and Q2 profits is higher than Q1. In the follow-up announcement on 18th June 2020 (Thursday), it was mentioned that profits in the second half of 2020 will be AT LEAST on par with profits in the first half of 2020. To calculate the full year profits, we need to know Q2 profits, which was not provided. In this case, I will use the information we have on hand, which is that Covid-19 only started spreading globally starting middle of February (half-way into Q1). Hence, we can reasonably assume that Q2 profits will be 50% higher than Q1. With the above information, we can derive the following: Q1 profits: US$3.672M Q2 profits: US$5.508M (50% higher) Q3 & Q4 profits: US$9.18M (at least on par with first half)   Full year 2020 profits = US$18.36M = S$25.7M (exchange rate of 1:1.4) Given that Medtecs has about 550million shares, Earnings Per Share (EPS) will be S$0.0467. If we use the average PE Ratio of 15, multiplied by EPS, the value of the stock price should be S$0.70. Given that investors around the world are highly bullish about the medical sector, PE ratio can easily be higher than the average of 15, which means the value of the stock price can go even higher than S$0.70. Current stock price is only $0.295.   However, one point which many people here missed out in their calculations is that investors do not just look at one year&rsquo s profits to determine the value of the company. Hence, we have to make some predictions for 2021 at the very least. Medtecs&rsquo sales are expected to drop next year, since this year is a black swan event. However, given that (1) the high infectability of the Covid-19 virus where total number of cases worldwide continue to break record highs, (2) vaccines are not expected to be readily ready until at least start of next year and (3) governments and organisations around the world will want to stockpile on medical supplies after learning their lessons the hard way, we can safely assume that Medtecs&rsquo sales will still be decent. Assuming a 50% drop in sales next year, EPS will be S$0.023. Take 2020 and 2021&rsquo s combined EPS and divide it by 2 years, multiply by PE ratio of 15, the short-term fundamental value of the stock will be S$0.522 (78% gain from current stock price).   For those long-term investors, you might ask, what happens after 2 years? For 2020 and 2021, Medtecs as a company would have earned unprecedented profits, running in the tens of millions of dollars as calculated earlier. A good management would use this money to expand in future growth areas so that even after the Covid-19 has been completely eradicated, future revenue and profits will continue to be much higher than what it achieved in the past.   In summary, Thursday&rsquo s announcement is actually very positive as we are only in the middle of June, but the company is already confident to announce that profits from second half of the year will be AT LEAST on par with profits from first half of the year.   Question: If Thursday&rsquo s announcement is very positive, why did Medtecs share price plunge on Friday late afternoon? I offer two possible explanations: First, as we all know, markets are not always rational. Many people buy and sell company shares without proper knowledge or homework, but based on their feelings and sentiments. These people can be easily taken advantage of by real investors/traders who have done their homework. This leads me to the second explanation.   The second explanation is that Friday&rsquo s movement is manipulated to flush out contra players, people who bought the company shares without doing their homework, as well as people who sold the shares based on fear. Senior Executives or seasoned investors will know that most companies&rsquo AGM is merely a formality to pass down resolutions and re-appoint directors for the next year. No one is expecting new information or surprise announcements that can significantly affect a stock&rsquo s price. Medtecs&rsquo AGM on Friday is no different. Resolutions were passed, directors were re-appointed, and it ended without fanfare. However, just within minutes after the AGM ended, more than 10 million shares were intentionally thrown down, causing the stock price to drop from S$0.32 to S$0.295. This sparked panic in many of the weak holders that I mentioned earlier, causing more to sell and others to cut loss. Legit investors would have never dumped their shares immediately after an AGM ended where nothing fancy is expected in the first place. Such a move is highly likely to be pre-mediated with the intention to earn by shorting, and quickly buying back even more shares from people who sold in a panic to prepare for an even bigger rise down the road. Friday&rsquo s afternoon movement has nothing to do with the company&rsquo s fundamentals and positive news that was announced earlier. For those who believe in the company&rsquo s fundamentals, it can be a good opportunity to buy.   ------------------------------ Macro-outlook Although many people may think that Covid-19 is coming under control with economies re-opening, truth is that the number of Covid-19 cases worldwide has continued to break record highs ( Link here: https://www.worldometers.info/coronavirus/worldwide-graphs/#daily-cases ) and new regions are becoming emerging hotspots. With this backdrop, medical supplies will continue to be in high demand by governments, organisations and hospitals worldwide. And this is to keep in mind that stockpiling of medical supplies for the future has barely begun in many countries. Hence, we can expect Medtecs business to remain blooming for at least until second half of 2021.     Other Questions Medtecs is going to face increased competition from new companies starting to produce masks and PPE. How is this going to affect the company? Governments, organisations (e.g. World Health Organisation) and hospitals will be the main people buying PPE and they would most definitely want to buy from trusted sources, not some random company who just started operations 6 months ago and may close down anytime. In this regard, Medtecs benefit from its brand and credibility, as it has been operating for more than 30 years. As shared in their Thursday&rsquo s announcement, Medtecs is &ldquo the preferred trading partner and supplier by international buyers, who have praised our products for quality&rdquo .   Summary Covid-19 has negatively impacted most industries and companies around the globe, and its impact is expected to continue for at least the next 1-2 years. The Medical sector on the other hand, is one of the rare few which has benefited greatly from it. Although most other companies in the Medical sector are already seeing rich valuations in their stock prices, Medtecs Intl remains undervalued with a Fundamental value of S$0.520 as compared to its current stock price at S$0.295. Medtecs Intl' s management has also expressed willingness to consider paying out dividends from its bumper profits. Combined with the backdrop that many investors are looking to invest in sectors that can benefit from this outbreak, especially when stock market indexes worldwide are already at pre-Covid 19 levels, Medtecs Intl is a rare gem and should see its stock price continue to break record highs in the very near term. ------------------------------ Hope the above insights help everyone here in making your decision on Medtecs next week! 😊 Full article linked here:  https://flyinginvest.wixsite.com/mysite/post/sgx-546-si-medtecs-intl