This article first appeared in The Edge Malaysia Weekly on November 13, 2023 - November 19, 2023

Supercomnet Technologies Bhd, with the stock code “0001”, was the first company to be listed on the ACE Market of Bursa Malaysia in 1999. On Aug 21 this year, the Kedah-based medical device and cable manufacturer achieved a significant corporate milestone by migrating to the Main Market.

But there is more to celebrate in 2023 than just the transfer of listing. Supercomnet also bagged this year’s The Edge Billion Ringgit Club (BRC) award for the highest returns to shareholders over three years in the healthcare sector — marking its second consecutive win since joining the BRC winners list last year.

Based on The Edge BRC awards methodology, the compound annual growth rate (CAGR) for total shareholder returns over the three-year period between March 31, 2020, and March 31, 2023, works out to an average of 43.4% a year, the highest among its peers in the healthcare sector. The three-year CAGR is significantly higher than the 25.1% it saw between March 29, 2019, and March 31, 2022, which led to Supercomnet winning this award last year.

During the period in review, Supercomnet’s adjusted share price jumped from 48 sen on March 31, 2020, to RM1.57 on March 31, 2021, before declining to RM1.32 on March 31, 2022. The counter managed to recover some lost ground to close at RM1.41 on March 31, 2023.

At the time of writing, however, it should be noted that Supercomnet’s stock price had been on a downward trend — declining 18% over the past 12 months, 16% year to date and 6% in the last six months.

Supercomnet makes medical devices, cables and wires as well as fuel tanks for the medical, automotive and industrial sectors at its plants in Sungai Petani, Kedah.

Incorporated on May 10, 1990, as a private limited company under the name of Supercomal Wires and Cables Sdn Bhd, the company changed its name to Supercomal Technologies Sdn Bhd in July 1998. It made its debut on the ACE Market in April 1999 and subsequently changed its name to Supercomnet in July 2009.

For perspective, at the time of its ACE Market listing, the group’s market capitalisation was merely RM144.08 million. Its market capitalisation has since risen more than sevenfold to RM1.04 billion to qualify for BRC membership.

Supercomnet previously said the transfer to the Main Market signified the company’s growth, profitability and financial strength as it had met the profit track record requirements for the transfer.

Between FY2019 and FY2022 ended Dec 31, Supercomnet’s profit after tax saw a three-year, risk-weighted CAGR of 9.6%. Its bottom line increased steadily from RM19.4 million in FY2019 to RM23.5 million in FY2020 and RM25.2 million in FY2021, before hitting a record profit of RM32.9 million in FY2022. The stronger earnings performance was a result of the group’s growing momentum from existing customers, in addition to maiden contributions from new customers.

Meanwhile, the pipeline of Supercomnet’s orders remains strong and continues to increase. Moreover, the automotive sector is expected to increase its contribution in FY2023, especially the fuel tank and wire harness segment.

Supercomnet managing director James Shiue Jong-Zone observed that the group is confident about its business prospects.

“Besides the pipeline of orders that we have in hand, our cash flow from operations continues to increase over the quarters. Financially, we have a lot of buffers and are ready to grow our business through internal and external channels,” he said in February.

Shiue further said Supercomnet remains optimistic about the group’s mid- to long-term prospects and will continue to work closely with existing and new customers on the development of new products.

The 77-year-old Taiwanese owned a direct stake of 20.94% and an indirect stake of 36.66%, held by his family, as at June 19, 2023. Another major shareholder is Supercomnet executive director Lim Eng Chuan with 7.01% equity interest.

A check on AbsolutelyStocks shows that Supercomnet was in a net cash position of RM194.5 million as at June 30 this year. But so far, there has been no sign of the company declaring higher cash dividends, judging by its consistent track record of paying a dividend per share of two sen from FY2020 to FY2022. A clearer guidance on that, if it happens, may well pave the way for a hat-trick next year.

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