Photo: Medtecs International
William Yang, deputy chairman and CEO of Medtecs International, on May 12 acquired 500,000 shares for $479,000, or an average of 95.8 cents each. This brings his stake in the company to 2 million shares or 0.364%. William holds his shares via a sub-brokerage account with a Taiwan broking house. William is the son of Clement Yang, executive chairman of the company. According to the company’s latest annual report, as of March 19, Clement holds a direct stake of nearly 24.7 million shares or 4.52% and a deemed stake of nearly 33.1 million shares, or 6.05%.
William’s purchase, which was made on the open market, came in the wake of a downgrade by DBS Group Research on May 7. In their report, analysts Woon Bing Yong and Ling Lee Keng lowered its target price to 92 cents from $1.25 and changed their “buy” call to a “hold”, citing “disappointing” earnings for 1QFY2021 ended March 31.
They note that Medtecs International, which over the past year had enjoyed an unprecedented surge in its business of providing personal protective equipment (PPE), recorded revenue of US$42.2 million ($55.9 million), up 5.9% y-o-y but down 62.7% q-o-q. Earnings in the same period came in at US$13.2 million, up 259.9% y-o-y but down 71.9% lower q-o-q.
The analysts note that “while no reason was provided yet for the decline in performance, we opine that a few risk factors may have played out, including a quicker pace of vaccination which has led to lower Covid-19 cases in key geographies and a loss of market share to domestic suppliers.”
In 2020, Medtecs share price surged from four cents to a dollar due to the pandemic, supported by an earnings surge of more than 10,000%.
In its 1QFY2021 earnings commentary on May 6, the company warned that “it will be a challenge for the company to exceed the level of performance of 2020.”
Nevertheless, it has “doubled up” its engagement with wholesalers, institutional clients and government agencies to offer its PPE provision services. As a result, it managed to secure several supply contracts in the Philippines and Cambodia in 1QFY2021.
In addition, Medtecs continues to expand its retail business, including through its Amazon US shop that has seen an increase in its daily sales volume by more than 10 times in 4QFY2020. The company will also continue to promote brand awareness by making its products available for Amazon UK, Europe and Japan.
CEO sells as DBS gains
Elsewhere, Piyush Gupta, CEO of DBS Group Holdings, on May 14 sold a substantial chunk of his shares in the bank on the open market. According to filings to the Singapore Exchange, Piyush sold 150,000 shares at an average price of about $29.89 each, generating proceeds of over some $4.5 million. With the sale, his stake in the bank has been trimmed from 2.48 million shares, or 0.097%, to 2.33 million shares, or 0.091%.
In FY2020 ended Dec 31, 2020, Gupta took a 24% pay cut. His take-home pay was $9.18 million as impairments and allowances set aside by the lender for the pandemic caused full-year earnings to drop 26% to $4.72 billion.
However, earnings have improved since then. In a trading update released on April 30, DBS reported earnings for 1QFY2021 ended March jumped 72% y-o-y to $2.01 billion and doubled q-o-q. This is also the first time the bank’s quarterly earnings crossed the $2 billion mark. The bank has declared an interim dividend of 18 cents per share for the quarter.
In line with the overall restoration of confidence and earnings recovery, shares of DBS have gained strongly since the Covid-19-induced selloff in March 2020. From the low of $17.92 in April, DBS shares have more than made up for the losses since then. Prior to the pandemic, DBS was trading at around $25.
