Thu, Apr 24, 2014 - Page 13 News List

MedFirst Healthcare stock surges on GRETAI debut

STRATEGY CHANGE:Encouraged by its success, the Taiwan-based medical store operator said it would no longer restrict itself to opening outlets near a hospital

By Camaron Kao  /  Staff reporter

MedFirst Healthcare Services Inc (杏一) yesterday saw its shares soar 50.63 percent on its debut on the GRETAI Securities Market, amid investor optimism over the company’s rapid expansion and market share gains.

The stock ended at NT$120.50, up from its initial public offering price of NT$80, valuing the company at about NT$304.87 million (US$10.05 billion). The over-the-counter index was down 0.55 percent.

MedFirst operates 184 healthcare supplies stores with medical consultancy service in Taiwan and China.

The company issued about 2.53 million shares for the initial offering and plans to use NT$202 million of the proceeds to open more shops, assistant vice president Jason Chen (陳孟宏) said.

The company has 177 stores in Taiwan, making it the largest medical store operator ahead of Wellcare Healthcare Supply (維康), which has 155 shops, Chen said.

It has seven outlets in China: four in Shanghai, two in Nanjing and one in Xiamen.

Its Chinese stores’ combined revenue rose 20 percent year-on-year to NT$50 million last year, while losses shrank 41 percent to NT$15 million, president Jimmy Tsai (蔡德忠) said.

Tsai said the company would open more than one shop each in China and Taiwan by the end of this year.

“We used to open stores near local hospitals in Taiwan, but we are thinking of changing our strategy since our stores can be profitable even without a hospital nearby,” Tsai said, adding that the company plans to open 100 more shops in Taiwan over the long term.

As for China, Tsai said the company would open shops in tier one and tier two cities in the coastal area of southeast China, eyeing their high average income.

MedFirst posted revenue of NT$3.37 billion last year, up 6.98 percent from NT$3.15 billion a year ago, according to a company filing with the Taiwan Stock Exchange.

The company’s product lineup includes about 40,000 types of medical, healthcare and biotech items, with own-brand products accounting for 7.5 percent of its total revenue last year, compared with 5.6 percent in 2012.

In the first quarter of the year, the company reported a revenue of NT$824.53 million, up 2.3 percent from NT$805.96 million a year ago.

Net profit was NT$107.14 million last year, or NT$4.71 per share, up 1.92 times from the previous year’s NT$36.67 million, or NT$1.64 per share. Tsai attributed the surge to shops opened in 2010 and 2011 turning profitable.

Profit also rose after the company’s new logistics center in Yangmei City (楊梅), Taoyuan County, which opened in February last year, helped cut costs, he said.

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