*Official* ISEC Healthcare (SGX: 40T)

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Dix

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Friday, August 5, 2016





ISEC Healthcare



ISEC Healthcare: (S$0.34) Healthcare stocks in favour; this one appears a laggard
Amid an uncertain environment, healthcare stocks appear to have stood out. Notably, Singapore Medical Group’s (SMG) share price has nearly doubled this week on an earnings turnaround.


Meanwhile, Singapore O&G (SOG) has appreciated 63.2% from the beginning of Apr to $1.25 today. Within the healthcare sector, we find ISEC Healthcare to be a laggard.


ISEC provides competitively-priced eye surgery, care and consultancy services. It plans to expand into regional markets via M&As. When compared to SMG, which is just turning around, ISEC is already is profitable, with solid growth prospects and balance sheet.


From a valuation angle, ISEC is also cheap compared to SOG, which currently trades at 35x and 30x forward P/Es using the consensus estimates of three brokers. ISEC currently trades at 25x and 21x forward P/E.


SOG is an appropriate comparison for ISEC given that both are in single specialty practice, while SMG is a turnaround play, hence valuations are still a work in progress.


Interestingly, both SMG and ISEC have the same shareholder - Dr Tony Tan of Parkway. He owns about 4% of ISEC and 20% of SMG. SMG also has a good portion of its business coming from opthalmology.


As such, we see scope for both companies to work together in future. Arguably, there is also the possibility of a merger of equals once SMG is able to fully execute its turnaround strategy.
 
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zv_francesca

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 Revenue from Malaysia operations in Ringgit Malaysia (“RM”) increased from RM28.9 million in 6M2015 to RM37.8 million in 6M2016, up 30.8%


 EBITDA was S$4.9 million in 6M2016 as compared to S$3.6 million in 6M2015

 PAT was S$3.3 million in 6M2016 as compared to S$1.9 million in 6M2015

 Total cash and cash equivalents as at 30 June 2016 was S$26.7 million. No debts.

 Cash balances (exclude unutilised IPO proceeds) increased from S$16.1 million as at 31 Dec 2015 to S$18.0 million as at 30 June 2016
 
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Xavier_CP

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Nobody playing this counter? seem like its fundamental is quite okay...
 
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Dix

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2Q16 net profit surged 47% y/y to $1.7m, while revenue increased 11% to $8.2m, boosted by new acquisition Southern Specialist Eye Centre which offset the cessation of a clinic at Mount Elizabeth Novena Specialist Centre. Gross margin expanded to 47.5% (+0.8%). Interim DPS of 0.22¢ maintained. NAV/share at $0.11.
 
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