With a gradual recovery in birth rates in Singapore, coupled with the Group’s ability to consistently gain market share in live births in Singapore, we expect the O&G segment to continue registering better growth.
We also expect the cancer-related segment to support Group’s FY19e profitability amidst persistent headwinds – (a) sluggish birth rate and (b) structural slowdown in medical tourism.
Profitability from the O&G and Cancer-related segment should improve as more doctors breakeven and gain more patient load. The Group is actively seeking suitable doctors to join its team to further grow its four business pillars. New doctors typically take 1 – 2.5 years to break even.
The Group has a robust balance sheet with zero debt and a cash position of S$21.5mn (c.13% of its market cap).
Our most recent rating from our 13 August 2018 report, was Buy with a target price of $0.420. We are ceasing coverage on this counter due to the reallocation of internal resources.
S$1.25mn non-recurring item booked in 2Q18
Refer to the announcement dated 6 Mar-18, SOG has received the settlement amount of S$1.25mn for a settlement related to a dispute with its former Lead Independent Director, Mr. Christopher Chong Meng Tak.