Medtecs International (SGX: 546) was one of those companies that benefitted from the irruption of covid-19. As such it's also one that has suffered badly from its passing from pandemic to endemic disease. The reason for this is that Medtec makes those protective equipments that the world was so short of - and paying such premiums for - but of which we've now an interesting oversupply.
Sadly for investors that's just the way that things work out. The lesson of Medtech to us all is therefore that investing is about timing. There are waves and even storms that move through the global economy. Those will affect asset prices - that's rather the point of asset prices moving, that they reflect changes in the underlying economy. But that in turn means that we've got to be ready to buy on the dips and sell on the crests. Doing it the other way around is a great way for us to lose everything.
Medtecs International share price from SGX
Medtecs is a Taipei based manufacturer of the usual medical protective equipment and the other bits and bobs - urine collectors and so on - which can be and are made out of plastic. This is usually a fairly unglamoros business. Demand doesn't change much month by month, there are many companies which can make such things. Further, unlike much of the medical equipment industry these are things that do not required FDA or other regulatory approval before being put on the market. There are, that is, no regulatory moats around what profits can be made here.
As we can see from the Medtecs share price chart above that global shortage of protective equipment during the covid pandemic led to a massive surge in pricing and business. But this is then the problem with a business which it is easy for others to enter. Many people did. So, the surge only lasted as long as it took others to enter the business line. Yes, sure, the pandemic is over but there's still elevated demand for the protective equipment - just in case and all that. But there are none many more suppliers. Medtecs is therefore stuck back in a business with no moat around profits and more competition. Those glory days aren't going to return even if there will continue to be interesting variations in the stock price as today.