This article first appeared in The Edge Malaysia Weekly on February 5, 2024 - February 11, 2024

UMediC Group Bhd, an ACE Market-listed medical device distributor and manufacturer, is controlled by UWC Bhd co-founders Datuk Ng Chai Eng and Datuk Lau Chee Kheong.

Despite being a mid-cap company with a market capitalisation of about RM230 million, UMediC has a number of institutional investors that make up its top 30 shareholders. They include Maybank Malaysia SmallCap Fund, Public Mutual funds, Phillip Mutual funds and Fortress Global Growth Fund.

While Ng says he recognises the fact that the medical device business may not experience growth as rapid as that of the semiconductor and technology sectors, he believes UMediC has the potential to achieve a scale comparable to that of UWC in the future.

“We have to acknowledge the fact that unlike the semiconductor business, the medical device industry — except for the rubber glove industry during the Covid-19 pandemic — does not usually give you exponential growth,” he tells The Edge in an interview.

“At UMediC, we are building the fundamentals for the next big push. There are a lot of things that we can do in the medical device business. But it is a steady business so we can’t expect explosive growth.”

When asked if UMediC will ever be as big as UWC, Ng, who is non-executive chairman and a major shareholder of UMediC, replies: “You will never know. But realistically, we have to be patient. I believe both companies have growth potential, but their traction of growth will be different.”

According to him, UMediC’s aspiration is to become a one-stop, fully integrated medical service provider. “Our advantage is that we started earlier than many of our competitors. If you look at some ATE (automated test equipment) companies in Malaysia, they diversified into medical devices only recently. We started more than 20 years ago,” he points out.

UMediC is 51.44%-controlled by UMediC Capital Sdn Bhd, a private vehicle of Ng, his nephew Eric Lim Taw Seong and his business partner Lau. Each of them also directly owns 5% equity interest in the medical device specialist. Lim, 46, is executive director and CEO of UMediC while Lau, 61, is a co-founder of UWC and a former non-executive director of UMediC.

It is worth noting that Ng’s 28-year-old daughter Ng Sze Hui is his alternate director at UMediC. She is also the company’s legal and product development manager.

Ng points out that UWC and UMediC are being operated independently as there is not much synergy between the two companies. “We split them into two listed entities so that we can unleash their full potential in terms of stock valuation,” he says.

“Also, the idea is for my son Matin [Ng Chin Liang] to manage UWC and my daughter Sze Hui to take care of UMediC, so that the two of them can focus on running just one company instead of overseeing both companies at the same time.”

As non-executive chairman, Ng says his main role is to contribute ideas to strategy and give advice. “I am not running the show at UMediC. But of course, as a businessman, I will always seek new catalysts and I am always closely monitoring government policy,” he adds.

Listed on the ACE Market of Bursa Malaysia in July 2022, UMediC initially began as a distributor of medical devices before venturing into manufacturing 10 years ago. The group’s manufactured products, including halal-certified pre-filled humidifiers that are patented in Malaysia, are for one-time use or are single-patient-use consumables.

As for its distribution business, UMediC’s principals and suppliers include Merit Medical, Philips Healthcare, GE Healthcare and Mindray.

Ng says UMediC could follow in UWC’s footsteps as the former has inherited the latter’s spirit of evolving and moving on to bigger things.

“Periodically, if you look at UWC’s top five customers five years ago and today, they are completely different. Similarly, for UMediC, when a product is no longer hitting a threshold of margin that we are comfortable with, we outsource it and venture into a new product,” he explains.

For instance, UMediC used to make hospital beds, but it stopped doing so because the margin was too thin and the competition was intense.

“Our spirit is to move on to the next big thing. Even though UMediC was one of two pioneers in the medical bed segment, if the margin is not there, we would rather not do it because we don’t want to waste our time and resources,” Ng stresses.

Over the past 12 months, UMediC’s share price has dropped 17%. It closed at 63 sen last Wednesday, giving the company a market capitalisation of RM235.5 million.

UMediC’s net profit for the financial year ended July 31, 2023 (FY2023) grew 60% to RM10.31 million from RM6.43 million a year earlier. The group generated earnings of RM1.89 million in 1QFY2024 ended Oct 31, 2023. 

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