FAST NEWS: PW Medtech repurchases shares after earnings announcement

The Latest: Medical device maker PW Medtech Group Ltd. (1358.HK) reported Tuesday it repurchased 700,000 and 590,000 of its shares on Sept. 2 and Sept. 3, respectively.

Looking Up: The company made the purchases three days after announcing its latest financial results, suggesting management may be optimistic about its outlook, or believe that the shares are currently undervalued.

Take Note: The use of internal funds to repurchase shares may reduce the company’s cash for daily operations and future investments. In addition, the modest amount of the buyback will have a limited effect on the company’s share price.

Digging Deeper: PW Medtech makes and sells high-end infusion devices, intravenous indwelling needle products and insulin needles, mostly for use in hospitals. The company’s revenue took a hit during the pandemic, but its business has largely returned to normal over the past two years as the government promotes domestic production of medical devices. Last week it reported its revenue rose 6.1% to 338 million yuan ($47.5 million) in the first half of the year, while its adjusted profit increased 3.4% to 100 million yuan. The latest growth was slower than last year due to a government anti-corruption crackdown in the medical device sector, and an acceleration of industry consolidation.

Market Reaction: PW Medtech shares rose on Wednesday and closed up 1.8% at HK$1.11 by the midday break, near the upper end of their 52-week range.

Translation by A. Au

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