KUALA LUMPUR (Dec 9): Analysts are split on prospects for UMediC Group Bhd (KL:UMC) after the medical device distributor and manufacturer kicks off its financial year ending July 31, 2026 (FY2026) with weaker first-quarter results. 

Net profit fell 3.58% year-on-year to RM1.78 million for the three months ended Oct 31, 2025 (1QFY2026), from RM1.85 million. Quarterly revenue, however, rose 8.48% to RM14.16 million, from RM13.06 million a year ago. The increase was mainly due to a higher demand for medical devices from both public and private hospitals as well as healthcare service providers.

UMediC’s core profit after tax and minority interest (Patami) of RM1.6 million for 1QFY2026 was below Hong Leong Investment Bank (HLIB) Research's and consensus estimates. 

UMediC’s results shortfalls and the ringgit's strength against the US dollar have prompted HLIB Research to slash its earnings forecasts by 14.4% for FY2026 and by 13.1% for FY2027. 

The earnings downward revision, it said, is to reflect lower revenue assumptions for the manufacturing division and weaker profit before tax margin assumptions for both the manufacturing and distribution divisions.

As such, HLIB Research anticipates UMediC will deliver a core annual Patami of RM8.3 million for FY2026 and RM9.3 million for FY2027. The group posted an annual net profit of RM8.13 million for FY2025. 

HLIB Research reduced its target price for UMediC to 35 sen per share (from 40 sen) after the earnings cuts and kept its “hold” recommendation for the stock, citing that the recent share price correction has largely priced in the headwind. 

On the other hand, Phillip Capital maintained its “buy” call for the stock, with a higher target price of 51 sen, from 45 sen previously, supported by the group’s growth trajectory on capacity doubling and robust global demand, a healthy pipeline of new products broadening its revenue stream and attractive valuation.

Phillip Capital also kept its earnings estimates for UMediC, anticipating the group to deliver a core net profit of RM9.4 million for FY2026 and grow to RM11.1 million for FY2027.

This came after Phillip Capital said UMediC’s core net profit of RM2 million for 1QFY2026 was within the research firm’s and consensus estimates. 

At Tuesday’s noon market break, UMediC’s share price rose half a sen or 1.49% to 34 sen, for a market value of RM127 million.