Health Management Intl - OCBC Investment 2017-05-12: 3QFY17 Core PATMI Up 12%

Health Management Intl - OCBC Investment 2017-05-12: 3QFY17 core PATMI up 12% HEALTH MANAGEMENT INTL LTD 588.SI

Health Management Intl - 3QFY17 core PATMI up 12%

  • Health Management International (HMI) reported its 3QFY17 results, with revenue up 6.7% YoY to RM107.7m, mainly due to higher patient load and average bill sizes in its two hospitals – Mahkota Medical Centre and Regency Specialist Hospital. 
  • We note that ‘other losses’ of RM0.3m was recorded vs. a RM3.7m gain last year, attributable to the weakening of MYR resulting in FX charges. 
  • In addition, the acquisition of non-controlling interests in its two hospitals resulted in a one-off incurrence of RM7.3m in professional fees and other related costs. This acquisition was completed on 27 Mar. Thus the group recorded a net loss of RM1.6m, vs. a PATMI of RM8.7m in 3QFY16. 
  • Excluding non-operational and one-off items, core PATMI rose 11.6% to RM7.1m and 9MFY17 core PATMI was up 28% to RM21.6m.
  • Looking ahead, 4Q17 and FY18 earnings should offer clarity to investors on earnings, given the consolidation of ownership in both hospitals and less one-off costs. 
  • We continue to believe the group is on a healthy growth momentum, backed by a multi-strategy approach and strong management team. 
  • We maintain our BUY rating and DCF-derived (base year FY18) fair value estimate of S$0.80.

Jodie Foo OCBC Investment | http://www.ocbcresearch.com/ 2017-05-12
OCBC Investment SGX Stock Analyst Report BUY Maintain BUY 0.800 Same 0.800