These Malaysian companies jump onto the pandemic bandwagon, how many will make it?
21 May 2020
There is an increasing number of Bursa Malaysia-listed companies announcing plans to divert their production and distribution capabilities into manufacturing medical products and equipment, such as face masks and shields, hand sanitizers and disinfectant products, as well as medical ventilators.
The most recent one is probably lingerie manufacturer Caely Holdings Bhd, which announced it will diversify into face masks and personal protective equipment (PPE) production for exports, targeting countries like Germany, the US, Australia, Saudi Arabia and India.
The products will be manufactured for Ni Hsin Resources Bhd’s brand name products mainly consisting of fabric face masks (under the brand name of Masketeer — Coolmax Fibre Protective Mask) and PPE.
Caely said the face masks that they produce would help protect against virus transmission and are washable for up to 30 times after each use.
The lingerie maker’s share price more than doubled in slightly more than three weeks from 24 sen on April 27 to 49 sen on May 15. Ni Hsin’s share price also leaped from 11 sen on May 14 to 18 sen on May 18.
As for PPE, Caely is currently manufacturing protective suits which are very much in demand for healthcare workers on the frontline combating the Covid-19 outbreak.
Meanwhile, LYC Healthcare Bhd, whose share price has more than tripled since late March, announced that its wholly-owned subsidiary LYC Medicare Sdn Bhd is partnering with Biofresh Hygiene Services Sdn Bhd to market cleanliness, hygiene and sanitation services in Malaysia amid rising awareness of hygiene due to the Covid-19 outbreak.
Under the three-year partnership, LYC Medicare will be granted the rights to use all marketing materials developed by Biofresh to generate sales for Biofresh hygiene services.
Some of the services offered include disinfection services using ultra-low-volume misting for the entire space of the targeted area, with which rapid antimicrobial prevention is achieved within three minutes with a kill rate of up to 99.99%, LYC claimed.
The list is getting longer. Three Malaysian listed firms — Sanichi Technology Bhd, AT Systematization Bhd and PNE PCB Bhd — have joined forces with US-based company Arzon Solar LLC (ARZ) to produce medical-grade mechanical air ventilators to take advantage of the worldwide shortage of the product.
The participating companies have inked a memorandum of understanding to form a joint-venture company for the purpose.
Under the agreement, the Malaysian companies will be responsible for the production of the ventilators and obtaining the necessary licences and certificates required, while ARZ will be responsible for the distribution and marketing of ventilators for both the domestic and international markets.
But, simply put, the question remains, are these newcomers only looking to ride on the hype to merely push up their share prices in the near term, or will they truly reap the benefits of their new ventures with increased profits in the long run?
The catch is probably obtaining the necessary licences and certificates required from the authorities, particularly products like ventilators and test kits that will be used in the hospitals.
My EG Services Bhd (MyEG) has begun taking preorders for its Covid-19 rapid test kit since mid-March, even before it got any approval from the Ministry of Health (MoH).
MyEG defended that the test kits, claimed to be developed by an unnamed “reputable” Chinese biomedical company, had already been approved by health authorities in China and Europe and qualified for emergency use by the US Food and Drug Administration (FDA).
However, Malaysia’s Medical Device Authority (MDA) under the MoH clarified later in the month that it never gave permission to MyEG to advertise, distribute or sell Covid-19 test kits.
In fact, the MDA said the advertisements by MyEG could trigger confusion, encouraging people to purchase the tests, with subsequent danger arising from possible false positives by those not trained to interpret the test results accurately.
Subsequently, MyEG has clarified that its Covid-19 rapid test kits do exist, and is currently awaiting approval from the local authorities and certification from the MoH.
Coincidentally, MyEG’s share price has gained more than 60% since the initial announcement.
Ho Wah Genting Bhd, which has been searching for a core income generative business, is also awaiting MoH approval for its test kit to be distributed in Malaysia. It also wants to distribute China-developed Covid-19 diagnostic kits. The company announced that its subsidiary HWG Consortium Sdn Bhd was appointed as a distributor by Shanghai Liangrun Biomedicine Technology Co Ltd.
Likewise, ever since the announcement on May 15, Ho Wah Genting’s share price has gained nearly 14%.
Source: The Edge Markets