Biz Buzz: Halo effect

Reminiscent of how the avalanche of demand from retail investors forced tycoon Manuel Villar Jr.-led AllDay Marts to refund 1,781 local small investors (LSI) for excess initial public offering (IPO) subscription, the stock market debut of Medilines Distributors Inc.—led by the tycoon’s brother, Virgilio Villar—likewise drew strong interest and breached the maximum LSI allotment.

Some 82.5 million common shares, or 10 percent, of the IPO of Medilines were reserved for LSIs. Each LSI applicant may subscribe up to 43,000 shares at the offer price of P2.30 per share through the Philippine Stock Exchange Electronic Allocation System (PSE Easy). But as demand exceeded allotment, like what happened to AllDay’s IPO, a refund process through trading participants is under way.

Despite the IPO price of this pioneering health-care pure-play being expensive relative to its regional peers, many believe the premium is well-deserved given its market leadership and growth prospects.

From 2018 to 2020, the company grew its revenue at compounded annual growth rate (CAGR) of 11.9 percent to nearly P1.5 billion, while net income grew at a CAGR of 16 percent to P103 million.

Medilines distributes critical medical equipment including computerized tomography scan (CT scan) machines and X-ray machines, which help in the early detection of COVID-19 complications. Its portfolio also includes reverse osmosis machines for the treatment of patients with COVID-19 complications in intensive care units.

It operates in health-care segments valued by Ken Research at P47.5 billion in 2020 and expected to grow to P82.7 billion by 2025.

In diagnostic imaging, Medilines has a market share of 18.2 percent. In dialysis, it has a market share of 50.5 percent, while in cancer therapy, it holds a 90.4-percent share.

Medilines carries global brands such as Siemens and B. Braun (Germany), as well as Varian (United States).

The company is scheduled to list its common shares on the main board of the PSE on Dec. 7 under the trading symbol “MEDIC.”

—Doris Dumlao-Abadilla

PSE Easy warning

If there are flying voters, there are also flying investors who want to get more than their fair share of IPO allotment.

Now that the investing public has discovered PSE Easy as a convenient way to get IPO allotment—although typically just up to P100,000 unless otherwise raised by regulators—the local bourse has launched a crackdown against people who may be using multiple accounts to get larger allotments.

“PSE Easy aims to give equal opportunity to all LSIs to participate in IPOs. LSIs are expected to create only one account … Recently, we noted that several investors created two or more accounts by altering one or more personal information. The same individuals attempted to file multiple application to purchase forms in the recent public offerings,” PSE president Ramon Monzon said.

Monzon warned that such practices were not allowed and any fraudulent scheme used to skirt the system would be dealt with accordingly.

—Doris Dumlao-Abadilla

Lifting the mood

It’s been a tough year for a lot of Filipinos. Not to worry, a concert will lift the mood, even for a while.

And so, ABS-CBN Corp.’s The Filipino Channel and advertising veteran Gladys Basinillo’s Praxis are teaming up for the Salubong Christmas concert, dubbed the “music event of the season.”

The virtual concert, dedicated to medical front-liners and overseas Filipino workers, will air on Dec. 10 and Dec. 11 through KTX.ph. The event was also supported by Morris Garages.

According to Basinillo, the event was part of ongoing efforts to revive the local music industry, among the countless segments hit hard by the COVID-19 pandemic.

Salubong will feature popular musical artists Aegis and Sponge Cola, and breakthrough rapper CLR.

—Miguel R. Camus