Thai pharmaceutical and supplement manufacturer Mega Lifesciences Pcl. (SET: MEGA) saw a sharp decline in its share price on Thursday after the US imposed new sanctions on Myanmar’s defense ministry and two banks used by the ruling military junta.
The share price of MEGA dropped THB3.25/share, or 8.44%, to THB35.25/share as of 10.53 A.M. Bangkok time, with a trading value of THB236 million.
On Wednesday, the US placed new sanctions on Myanmar’s defense ministry and two banks that the ruling military junta has used to import weapons and other supplies from abroad.
The US Treasury Department issued a statement saying the military imported arms, equipment, and raw materials to make weapons to assist its “brutal repression,” and that it relied on outside sources, including Russian organizations under sanctions.
Myanma Investment and Commercial Bank (MICB) and Myanmar Foreign Trade Bank (MFTB), both state-owned institutions, were also subject to sanction.
Thai insiders told the Bangkok Business News that Thailand and other ASEAN nations would be financially affected by the sanctions because of their ties to local banks.
According to Finansia Syrus Securities (FSS), the latest US sanctions against Myanmar have had a negative sentiment on MEGA’s stock price since the company has a subsidiary in the country (Maxxcare Distribution), and given that Myanmar was the largest market with significant growth, accounting for 78% of Maxxcare’s revenue in 2021 (and 38% of MEGA’s total revenue).
FSS sees a buying opportunity in MEGA shares due to the stock’s steep decline, which has resulted in a cheap P/E, although the brokerage is planning to lower its target price from THB65.0/share.