Mega Lifesciences (MEGA) Q2 2025 earnings summary

Executive summary

• Operating revenue for 1H25 declined 14% YoY to THB 6,607mn, mainly due to a sharp drop in Maxxcare business in Myanmar.

• Mega We Care segment revenue grew 2.6% YoY, with low double-digit growth in other markets after adjusting for Myanmar and currency effects.

• Gross margin improved to 51.5% from 47.7% YoY, driven by a favorable segment mix and higher Maxxcare margins due to currency effects in Myanmar.

• Reported net profit fell 15.1% YoY, primarily due to the Myanmar business decline and higher tax expenses following the expiry of tax privileges.

• Strategic focus on specialization, brand development, and a five-year plan for business growth and product pipeline expansion.

Financial highlights

• Operating revenue: THB 6,607mn for 1H25, down 14% YoY; gross profit: THB 3,403mn, down 7.1% YoY; gross margin rose to 51.5%.

• Maxxcare distribution revenue fell 34.4% YoY to THB 2,283mn, fully attributable to Myanmar.

• OEM revenue rose 10.5% YoY to THB 147mn in 1H25, contributing 2.2% to total revenue.

• Operating cash inflow was THB 859mn, representing 102% of net profits.

• CapEx of THB 370mn in 1H25, mainly for manufacturing expansion in Thailand, Indonesia, and Vietnam.

Outlook and guidance

• Target to double consolidated net profit by 2025 compared to 2019, with significant gains projected by late 2028 and early 2029.

• Over 120 new products in the pipeline, with 60 launched between 2022-24, expected to drive future sales.

• Indonesian manufacturing acquisition to provide access to a large new market, with meaningful contributions expected from 2026.

• Planned investment of THB 505mn in 2025-26 for plant upgrades and ESG initiatives.

• Growth opportunities identified in both drug and supplement markets, with the latter being five times larger.