+ Revenue surged to S$21.5mn. In just 2 years post IPO in December 2017, CBH has expanded revenues from just S$288k in FY17 to currently S$21.5mn. It has acquired two core assets in Indonesia (lab and renal care), aesthetic clinic and dental facilities in Singapore and a medical centre in Manila. IGM accounted for 48% of FY19 revenue (or S$10.3mn).
+ Turning EBITDA positive. CBH turned EBITDA positive* in 3Q19 of S$0.38mn. This further grew to S$0.55mn in 4Q19.
*exclude one-offs (fair value adjustments and other non-recurring opex), share option expenses and R&D expenses.
– Operational challenges in Indonesia. After acquiring IGM Labs in May19, the ramp-up was delayed in part to contracts still novating to CBH. Another challenge in Indonesia is the long trade debtor days for government reimbursement. Trade receivables in FY19 rose 5-fold to S$10.7mn. After taking over operations, CBH is taking measures to shorten the trade debtor days from the authorities.
We expect another year of strong growth for CBH. The largest contribution will come from recent acquisitions – IGM and Dental Focus. Newly opened facilities in Malaysia and the Philippines will be another source. Contribution from Hong Kong is at risk with Covid-19 outbreak disrupting patient flow from China.
Maintain BUY with a target price of S$0.26. The early years of CBH will be spent building its regional footprint. We believe CBH is focused on organic growth of its’ acquisitions through investing into newer facilities, larger economies of scale in operations, cross-sell and introduce more complex services across their regional platform.
Overview of operations:
Medical clinics/ centres