PNB Capital and Investment Corp. said the listing of medical equipment distributor Medilines Distributors Inc. in December bodes well for the company as the benchmark index may start its upward trajectory before the year ends.
PNB Research expects the Philippine Stock Exchange (PSE) index to finish at 7,490 to 8,100 this year, on the so-called “Santa Claus rally,” on expectation that the relatively low yield environment will allow earnings multiples to remain elevated. This suggests a potential upside of up to 11 percent from Friday’s close of 7,289.61 points. The main index closed at 7,230.15 points on Wednesday.
“We look forward to offering to investors this trailblazing deal that will allow them to partake in the country’s growing healthcare industry,” Gerry Valenciano, president and CEO of PNB Capital, said. “GDP growth starting the second quarter of 2022 will encourage positive sentiment and investors are looking forward to less strict pandemic curbs overall,” Alvin Arogo, vice president and head of research of Philippine National Bank, said.
PNB Capital is the sole issue manager, lead underwriter and sole bookrunner for the transaction.
Virgilio B. Villar, chairman of Medilines and brother of businessman Manuel B. Villar, expressed the hope investors will not pass up the opportunity to invest in the healthcare industry, especially in the time of the Covid-19 pandemic.
“We are now one step closer to our vision of providing the public an investment opportunity that is set to rapidly grow amid the Covid-19 pandemic and beyond as everyone realizes the importance of the healthcare industry,” said Villar.
Medilines is a leading distributor of medical equipment in the country. It maintains a portfolio of best-in-class equipment from multinational brands such as Siemens Healthineers (Germany) for diagnostic imaging, B. Braun (Germany) for dialysis and Varian (USA) for cancer therapy.
Both the Securities and Exchange Commission and the PSE have already gave their green light for Medilines’ initial public offering, which will be traded under the ticker MEDIC.
Based on a preliminary prospectus, Medilines will be offering up to 550 million primary common shares and up to 275 million secondary shares at an offer price of up to P2.45 per share, or proceeds of about P1.28 billion.
Proceeds will be uses to fund the company’s working capital for its existing products, expand into the medical consumables segment, and to repay its debt.
Medilines intends to finalize its offer price on November 16. The target offer period for the IPO will be from November 22 to November 26, while the listing date is on December 7.
Founded in 2002, Medilines plans to expand its presence and product portfolio to help enhance the country’s healthcare system through quality medical devices.
The company’s revenues for the first semester of 2021 jumped to P815 million which is higher by 281 percent year-on-year. Net income during the same period in 2021 was at P100 million which is equivalent to almost double of the net income posted for full-year 2020. The company attributes the profitability growth to the increase in the sales of cancer therapy machines.