Wolf Money(Singapore Medical Group)

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About 

Singapore Medical Group(SMG) own a chain of multi disciplines clinics. They run clinics from oncology, lasik, cancer centre to paediatric. They are also providing diagnostic services like MRI and CT scan through their subsidiary lifescan. They manage close to 40 clinics currently.

I have been looking for a healthcare play in my portfolio for many years. Non of them pass my valuation test. Singapore Medical Group is among the lowest valuation medical stock listed on SGX. I welcome SMG into my portfolio. Below are the 10 things you need to know about SMG.



Summary

1.) Lead by ex parkway MD Tony Tan which have a good track record of running parkway and turning them into a giant of the healthcare industry.

2.) Recent q1 result shown 22% rise in profit to 3.8m. Likely recovery from covid disruption compare to FY 2020. FY21 earning likely to come in around 12-13m. About 11-12x forward p/e.

3.) Big picture of Singaporean spending more on healthcare due to ageing society.

4.) Healthcare industry in general are more defensive

5.) Valuation is undemanding at 1x book and p/e 11x vs raffles medical at 2x book and 29x p/e. SMG is a net cash company to a tune of 18m.

6.) High growth phase 

7.) In high growth market like Vietnam and Indonesia. Vietnam will be a bigger economy than Singapore in less than 10 years time. 

8.) There is always that jackpot element of a potential M&A or value enhancement exercise as mention by management. 

9.) Healthcare cost has always run ahead of inflation which give them plenty of pricing power. I have not know of anyone negotiating medical fees inside the operating theatre.

10.) Downside risk include covid lockdown and a lack of healthcare workers,weak foreign patients number coming to Singapore for medical treatment.

Healthcare spending is going in one direction which is UP, UP and UP. Is SMG the right one for you? You decide.


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Disclaimers 

All investments is highly speculative in nature and involves substantial risk of loss. We encourage our reader to invest very carefully. We also encourage reader to get personal advice from your professional investment advisor and to make independent investigations before acting on information that we publish. Much of our information is derived directly from information published by companies or submitted to governmental agencies on which we believe are reliable but are without our independent verification. Therefore, we cannot assure you that the information is accurate or complete. We do not in any way whatsoever warrant or guarantee the success of any action you take in reliance on our statements. All information provided are for information only. Buyer beware,do you own due diligence.



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