The report is produced by Phillip Securities Research under the ‘SGX StockFacts Research Programme’ (administered by SGX) and has received monetary compensation for the production of the report from the entity mentioned in the report.
The Group raised S$11.3mn from share placement to accelerate its growth plans for its South-East Asia entities and strengthen its balance sheet. The Group is currently considering Vietnam, India and Thailand as potential ventures in the future. Management has guided that the Group is done acquiring for now and focus will be placed on net income by 4Q19.
With regards to the Hong Kong protests, management did not experience a significant drop in patient volume at its Hong Kong clinic. In fact, revenue from the Hong Kong clinic rose 20-25% MoM since the expansion in May 2019.
Maintain BUY with a lower TP of S$0.26 (prev TP: S$0.28). The lower target price was due to the increase in number of shares as a result of the recent share placement. We believe the two primary growth drivers for CBH is the healthy underlying demand for healthcare services in the three key countries that it is operating in – Indonesia, Philippines, Singapore, and its aggressive M&A in various EBITDA accretive businesses.
Despite this quarter’s miss in earnings forecast, we expect higher revenue contribution from the acquisitions and business expansions to kick-in in the second half of the year onwards to reach our FY19e earnings estimates. The full impact of the Group’s acquisitions will be seen in 4Q19.
We used DCF valuation to fully capture CBH impressive growth over the next five years.
Overview of operations:
Medical clinics/ centres