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Introduction & Market Context
Mega Lifesciences PCL (SET:MEGA) presented its first half 2025 financial results on August 29, 2025, revealing a challenging period marked by revenue declines primarily attributed to its distribution business in Myanmar. The company’s stock closed at THB 29.25, down 3.42% on the day of the presentation, currently trading at approximately 29% below its 52-week high of THB 41.25.
The Thailand-based pharmaceutical and nutraceutical company operates through two main business segments: MEGA WE CARE™ (branded products) and MAXXCARE™ (distribution). While the branded products segment showed modest growth, the overall financial performance was significantly impacted by distribution challenges in Myanmar.
Quarterly Performance Highlights
Mega Lifesciences reported total operating revenue of THB 6,607 million for the first half of 2025, representing a 14.0% decrease compared to THB 7,686 million in the same period last year. This decline was primarily driven by a 34.4% drop in the MAXXCARE™ distribution business, which fell from THB 3,483 million to THB 2,283 million.
As shown in the following chart of operating revenue breakdown:
In contrast, the MEGA WE CARE™ branded products business demonstrated resilience with a 2.6% year-over-year increase, reaching THB 4,177 million compared to THB 4,070 million in 1H24. This segment now represents 63.2% of total revenue, up from 53.0% in the previous year, indicating a significant shift in the company’s revenue mix.
The geographical revenue distribution reveals that Southeast Asia remains the company’s core market, contributing 77.9% of MEGA WE CARE™ revenue, with the Indochina region accounting for 59.2% of the total. Africa showed the strongest growth at 12.0% year-over-year.
Detailed Financial Analysis
Despite the revenue challenges, Mega Lifesciences achieved notable improvements in profitability metrics. The company’s overall gross margin increased to 51.5% in 1H25 from 47.7% in 1H24, primarily due to a favorable shift in revenue mix toward the higher-margin branded products business.
The following chart illustrates the gross margin improvements across business segments:
The MAXXCARE™ distribution business saw its gross margin improve to 30.2% from 27.8%, though the company noted this was largely attributable to dual currency rate effects in Myanmar rather than operational improvements. Meanwhile, the MEGA WE CARE™ segment experienced a slight margin compression, with gross margin declining to 63.8% from 65.2%.
Selling, general, and administrative (SG&A) expenses remained relatively flat at THB 2,204.2 million compared to THB 2,206.1 million in 1H24. However, as a percentage of revenue, SG&A expenses increased significantly to 33.4% from 28.7%, reflecting the impact of lower overall revenue.
The company’s summarized income statement shows adjusted net profit of THB 920.5 million for 1H25, representing a 12.4% decrease from THB 1,050.9 million in the same period last year:
Despite the profit decline, Mega Lifesciences maintained strong cash generation with operating cash flows of THB 859 million, a remarkable 46.5% increase year-over-year. The company also highlighted its consistently strong balance sheet with a net cash position, as reflected in its negative net-debt to equity ratio of (0.33) times.
Looking at the longer-term financial trends, Mega Lifesciences has demonstrated solid growth from 2019 to 2024, with operating revenue CAGR of 6.6%, gross profit CAGR of 11.1%, and adjusted net profits CAGR of 11.6%:
Strategic Initiatives & Forward-Looking Statements
Mega Lifesciences outlined an ambitious growth strategy focused on expanding its product portfolio and geographical presence. The company highlighted a healthy pipeline of over 120 products slated for future launches, which management expects will drive growth in coming years.
A key strategic initiative is the company’s expansion into Indonesia through the acquisition of a manufacturing facility, providing access to one of Southeast Asia’s largest markets. For the 2025-2026 period, Mega Lifesciences plans to invest THB 505 million, with THB 495 million allocated to the Indonesian manufacturing plant and THB 10 million to its Thailand facility.
The company’s growth strategy for its branded products business focuses on:
Management expressed confidence in the company’s ability to double its consolidated net profit in the future, building on its established leadership in Indochina with MEGA WE CARE™ branded products and its position as a leading international distribution company in Myanmar, Vietnam, and Cambodia with MAXXCARE™.
Beyond organic growth, Mega Lifesciences continues to search for acquisition opportunities in its core regions, aiming to capitalize on increased consumer demand for healthcare products following the COVID-19 pandemic. The company believes these strategic initiatives, combined with its strong financial foundation and market-leading positions in Southeast Asia, position it well for sustainable long-term growth despite current challenges in Myanmar.
While the presentation highlighted optimistic future prospects, investors will likely be watching closely to see if the company can successfully navigate the ongoing challenges in its distribution business while executing on its growth initiatives in Indonesia and other markets.
Full presentation:
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