Health Management International

Health Management International | Add

Target price: 79 cents

Aug 29 close: 61.5 cents

Broker: CGS-CIMB, Aug 28

Distribution and marketing expenses were 65 per cent higher due to the rebranding exercise, and should stabilise even with the opening of StarMed.

Health Management International's (HMI) 62.5 per cent-owned StarMed has received the relevant Ministry of Health licences and will commence operations in FY2019.

Spanning four levels, it will not only boast specialist outpatient and day surgery centres, but also a full range of radiology and diagnostic equipment.

Management expects a gestation period of two to three years, though start-up losses would be less hefty given the format of the ambulatory care centre.

We forecast RM3 million (S$1 million) to RM 7 million Ebitda (earnings before interest, taxes, depreciation and amortisation) loss per annum in its first three years of operation.

Notwithstanding slower inpatient load growth and the trend towards shorter hospital stays, HMI continues to invest in future growth. Plans to diversify marketing efforts to other South-east Asian countries are also in the pipeline.

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