• In the 2018 YTD, the SGX All Healthcare Index has generated a total return of 6.9%, compared with total returns of 2.9% and 1.8% respectively for the benchmark STI and the broader FTSE ST All-Share Index.
  • Six constituent stocks in the Index are healthcare equipment and supplies providers – Top Glove, Riverstone, UG Healthcare, Medtecs, Techcomp and QT Vascular. They have a combined market capitalisation of S$6.1 billion and averaged a total return of 29.4% in the YTD.
  • In the YTD, the three best performers among the six are: Techcomp (+130.4%), Top Glove (+49.5%) and QT Vascular (+8.3%). Note that Top Glove also has the third-largest weighting of 10.7% in the SGX All Healthcare Index.

The SGX All Healthcare Index is a free-float, market capitalisation-weighted index that measures the performance of Singapore’s listed healthcare sector. In the 2018 year-to-date, the Index, which comprises 31 constituents, has generated a total return of 6.9%, compared with total returns of 2.9% and 1.8% for the benchmark Straits Times Index and the broader FTSE All-Share Index.

Six constituent stocks in the SGX All Healthcare Index are healthcare equipment and supplies providers – Top Glove Corp, Riverstone Holdings, UG Healthcare, Medtecs International, Techcomp Holdings and QT Vascular.

Among these six, Top Glove, Riverstone and UG Healthcare make surgical/medical gloves, while Medtecs manufactures hospital textiles, including patient gowns, lab coats and surgical scrubs. Techcomp designs, manufactures and distributes life science equipment as well as analytical and lab instruments, while QT Vascular develops and sells devices for the minimally invasive treatment of vascular and coronary diseases.

These six constituent stocks have a combined market capitalisation of S$6.1 billion and averaged a total return of 29.4% in the year thus far, outperforming the broader SGX all Healthcare Index over the same period. The three best performers among the six in the YTD are: Techcomp (+130.4%), Top Glove (+49.5%) and QT Vascular (+8.3%). Note that Top Glove also has the third-largest weighting of 10.7% in the SGX All Healthcare Index.

The tables below detail the six constituents in the SGX All Healthcare Index that are categorised to the healthcare equipment and supplies sub-segment, sorted by market capitalisation.

NameSGX CodeMarket Cap S$M11 Jun Closing PriceTotal Return YTD %1 Year Total Return %3 Year Total Return 
Top Glove CorpBVA5,109.94.00049.5134.0N/A
Riverstone HldgsAP4722.60.975-8.1-7.336.6
Techcomp HldgsT43177.70.645130.4N/A68.7
UG Healthcare Corp41A44.00.2304.5-8.0-7.9
QT Vascular5I026.80.0138.3-59.4-92.9
Medtecs Intl Corp54624.70.045-8.2-8.2-34.8
NameSGX CodeIndex Weight %P/B (x)P/E (x)Dvd Ind Yld %
Top Glove CorpBVA10.707.0N/A0.71
Riverstone HldgsAP43.643.317.12.40
Techcomp HldgsT431.061.6101.1N/A
UG Healthcare Corp41A0.081.114.2N/A
QT Vascular5I00.291.61.6N/A
Medtecs Intl Corp5460.340.321.1N/A

Highlights of Three Best-Performing Healthcare Equipment & Supplies Stocks in YTD

Techcomp Banks on Robust China Demand

For the year ended 31 December 2017, Techcomp reported a 60.6% YoY gain in net profit to US$986,000, while revenue rose 8.9% to US$199.4 million, driven by higher demand for scientific equipment in China and other Asian markets.

Management expects the market for scientific equipment in China to grow in tandem with the government’s continuing investments in research and development, food safety and environmental protection. According to the Association for Instrumental Analysis, China is the fastest growing market for analytical instruments globally, and is projected to expand at a compounded annual growth rate (CAGR) of 6.8% between 2015 and 2020. The business outlook for other key Asian markets, which include India and Indonesia, is expected to remain stable, while that for Europe is anticipated to be challenging, as demand growth remains modest, the Group noted. Given that a significant proportion of Techcomp’s distribution products is sourced from Japan, any significant movement in the dollar/yen forex rate is also expected to have a material effect on its gross margin.

Techcomp, which is primary-listed on SGX and secondary-listed on HKEx, designs, develops, manufactures and distributes analytical instruments, life science equipment and laboratory instruments. Its business comprises manufacturing the group’s in-house products and operating its global distribution channels.

For the latest financial results, click here.

Top Glove Pursues Aggressive Expansion Goals

For the second quarter ended 28 February 2018, Top Glove reported a 37.7% YoY jump in profit after tax to RM215.9 million, while sales revenue rose 12.6% to RM958.4 million. The significant increase in sales volume was mainly due to higher demand for natural rubber gloves, particularly from the emerging markets of Asia ex-Japan and Eastern Europe, where healthcare awareness and hygiene standards are rising.

The Group is in the process of constructing two new manufacturing plants, and in the final phase of its proposed acquisition of Aspion Sdn Bhd, which will allow the Group to boost its product mix and provide access to new markets.By early 2019, and following its latest acquisition, Top Glove is projected to have 40 factories, comprising 34 glove factories and six supporting plants, 693 glove production lines, and an annual production capacity of 64.3 billion gloves.

To support its ambitious growth agenda, Top Glove will continue to pursue strategic expansion via organic and inorganic routes. Some of its goals include increasing its market share to 30% by 2020, becoming a Bursa Malaysia Top 20 company by 2020 and a Fortune Global 500 company by 2040, Executive Chairman Tan Sri Lim Wee Chai told Malaysian media in April.

Top Glove, the world’s largest manufacturer of gloves, is primary-listed on the Bursa Malaysia, with a secondary listing on SGX. With over 2,000 customers worldwide, Top Glove exports its products to more than 195 countries and employs 13,000 staff.

For the latest financial results, click here.

QT Vascular Rides Medical Tech M&A Wave

For the three months ended 31 March 2018, QT Vascular reported an attributable net profit of US$24.6 million versus an attributable net loss of US$8.77 million in the year-ago period, while revenue fell 7.6% to US$3.0 million.

QT Vascular noted that merger and acquisition (M&A) activity in the medical technology sector continues to ramp up, with major players having completed, or are in the process of completing, mergers and acquisitions. These activities are expected to continue through 2018, after Medtronic kick-started the year with the purchase of the Group’s Chocolate® PTA balloon catheter asset. As both the coronary and peripheral vascular market segments offer the greatest potential for the Group’s technologies, it continues to explore various strategic options, including M&As, disposals, joint ventures and fund-raising activities to optimise and/or unlock value for shareholders. The Group has also been in talks with a multinational corporation for the sale of the its coronary products, “with a view to entering into definitive agreements”.

Listed on SGX’s Catalist board, QT Vascular is engaged in the design, assembly and distribution of advanced therapeutic solutions for the minimally invasive treatment of complex vascular diseases. It collaborates with industry specialists and key opinion leaders in the medical sector to develop differentiated devices to improve outcomes in complex peripheral and coronary interventions.

For the latest financial results, click here.

This article was originally published on SGX.