(Bloomberg) --
Mercator Medical SA, a Polish producer of disposable medical supplies, has risen 1,000% in Warsaw trading this year after the coronavirus pandemic fueled demand for protective products and the company signed new contracts to supply to the U.S. and Australia.
The shares were up 21% at 1:14 p.m. local time after Mercator agreed to provide gloves from its factory in Thailand to Australia's Unispace Health. It brings the value of this year's key deals to 552.5 million zloty ($139 million), outpacing its total sales in 2019.
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The “pandemic allowed Mercator to show its potential and boost margins” Tomasz Rodak, analyst at BOS Bank SA said by phone. “More investors are now convinced that in the new reality the stock will be re-rated for the long-term, and will be a very valuable add-on to equity portfolios as a unique exposure to the growing medical industry and shield against potential new outbreaks.”
The reopening of economies may boost orders for protective gloves amid new sanitary restrictions in the coming quarters, Rodak said. The analyst sees a market test coming in 2021, when competitors open new production facilities, boosting supply. Meanwhile, the company's valuation discount to bigger Malaysian peers means its shares are attractive, he said.
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