Investor interest in stocks within the iEdge SG All Healthcare Index surged in 2020, with combined turnover increasing 328% in the year-to-date (YTD) 2020, compared to the same timeframe in 2019.
As its name suggests, the iEdge SG All Healthcare Index comprises healthcare providers, manufacturers and distributers of medical equipment, pharmaceutical companies, biotechnology companies and healthcare asset owners listed in Singapore.
In a world blighted by Covid-19 health threat, as economic recession looms on the horizon, job instability is pervasive and daily lives disrupted perhaps forever, healthcare remains one of the few bright sparks in the economy.
Along with investor interest, this has also translated into improved performance as the iEdge SG All Healthcare Index has climbed 35% in the YTD 2020. In general, healthcare has also been performing well over the past decade with the index delivering an annualised return of 9% since the end of 2010.
In our 4 Stocks This Week column, we will be looking at 4 constituents of the iEdge SG All Healthcare Index that have garnered the highest turnover in the YTD 2020.
Medtecs International (SGX: 546)
Medtecs is a well-known original product manufacturer of a wide range of medical consumables as well as personal protective equipment, hospital wear and workwear apparels. It has established strong presence in the US, Europe and Asia Pacific.
It also provides integrated hospital services, including rental and laundry of linens, management of laundry facilities, hospital automation and other non-core hospital functions, mainly to hospitals in Taiwan and the Philippines.
With Covid-19, its products and services has no doubt become more valued. This has boosted its total return in the YTD 2020 to more than 535%. Investors have also been much more interested in its stock, with turnover surging over 21000% in YTD 2020. Its market capitalisation is $129.1 million.
On its website, it also stated that it pledged to donate its anti-epidemic personal protective equipment, such as face masks, safety goggles, isolation gowns, coveralls, bouffant caps and shoe covers, to assist the Cambodian government in the fight to prevent the spread of Covid-19.
UG Healthcare (SGX: 41A)
UG Healthcare manufactures and distributes a wide range of latex and nitrile examination gloves, and ancillary vinyl gloves, surgical gloves and cleanroom gloves, as well as other medical disposables. Its gloves are mainly for the healthcare (medical examination procedures, diagnostic procedures and laboratories), food and beverage (food handling) and automotive industries.
In a business update to shareholders on 19 May, it stated that it has been striving its best to cope with increasing order for gloves and ancillary products from both existing and new customers, mainly in Europe, North America, South America, China and Africa, since the outbreak of Covid-19.
It also stated that the increase in demand has led to higher average selling prices. It was also already running at its maximum capacity of 2.9 billion gloves per annum, and plans to increase annual capacity by 300 million by mid-2021.
The announcement definitely bodes well for UG Healthcare’s immediate to near term business, enabling it to entrench its Unigloves brand and expand capacity.
This has led to a spike in its total return in YTD 2020 to 421%. Similarly, investor interest in the company has also rocketed by 21000%. Its current market capitalisation is $143.1 million.
Top Glove (SGX: BVA)
Exporting to over 2,000 customers in 195 countries, Top Glove is the world’s largest manufacturer of gloves with 26% of the world’s market share for rubber gloves. Apart from gloves, it has a comprehensive product range including condoms, face masks, dental dams and exercise bands for both healthcare and non-healthcare industries.
On its website, Top Glove announced its pledge to the fight against the spread of Covid-19 by donating 3 million gloves to China and 2.5 million medical gloves to Malaysia’s health ministry and police force among other entities.
In March, it also stated that its utilisation rate would be ramped up to 100%, from a current 90% level, due to the surging demand.
With a market capitalisation of $15.0 billion, Top Glove is the largest company among the four featured, and the second-largest in the iEdge SG All Healthcare Index. Starting at a much higher base, it has delivered an impressive 265% increase in total return in YTD 2020. It has also achieved this with a 3,700% growth in average daily turnover.
Riverstone Holdings (SGX: AP4)
Riverstone is a leading manufacturer of cleanroom and medical industry consumables, including healthcare gloves, nitrile gloves, finger cots, face masks, packaging materials and other consumables.
Riverstone’s share price has surged 147.5% since the start of the year, bringing its market capitalisation to $1.7 billion. While this means it is also coming off a higher base than the first two counters listed earlier, it has enjoyed an increase of over 1,700% in its average daily turnover in the YTD 2020.
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4 Stocks This Week is not a recommendation from us to buy or sell any of these stocks. For investors who are keen to find out more, you should continue researching about them before making your investment decisions.