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.
Maintain BUY with an unchanged TP of S$0.28. 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 following acquisitions and business expansions to kick in from 2Q19 onwards to reach our FY19e earnings estimates.
The growth drivers:
We used DCF valuation to fully capture CBH impressive growth over the next five years.
Cost of equity = 10%; WACC = 8%; terminal growth rate = 3%
For more details on CBH’s business strategy, please refer to our Initiation Report dated 1 April 2019.
Medical clinics/ centres