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Tuesday, 28 March 2017

ISEC Healthcare

28/3/2017
Accumulate:
  1. Relatively attractive valuation PE 22.5 with high growth
  2. Growth story - acquisitions and sector growth
  3. Attractive dividend yield 3.36% and growing
Metrics
  • Last done (as of 28/3/2017): S$0.295
  • PE 22.5, PB 2.51
  • Revenue CAGR ~15%, Earnings CAGR ~28%
  • Debt to Equity 0%
  • Dividend yield 3.36%, Dividend CAGR ~110%
  • ROE 11.42%, ROA 10.47%
Operations
  • Specialist medical eye care services with 19 specialist doctors at 4 locations in Malaysia and Singapore
  • In 2013 ISEC KL performed over 5,000 major surgeries and served more than 70,000 patients
Growth story
  • ISEC has proposed the acquisition of JL Medical, a group of four GP and aesthetic clinics in Singapore. ISEC is expanding into complementary specialties. Valued at SGD13.9m or just 12x P/E, this will be an EPS-accretive deal
  • ISEC has a global M&A pipeline, Indonesia, Taiwan, Vietnam, Cambodia and China
  • Key sector drivers: ageing population, increasing awareness, rising income level, increase in private insurance coverage
Risks
  • Acquisitions delay or do not materialize
  • Further MYR depreciation against SGD
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