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Simons Trading Research

Author: simonsg   |   Latest post: Tue, 22 Nov 2022, 4:16 PM

 

Thomson Medical Group - Gearing for Next Stage of Growth

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TMG Reports Solid FY22 Results; Declares Special Dividend

  • Last month, Thomson Medical (TMG, SGX:A50) reported net profit more than tripled to S$53.8m in FY22, boosted by higher patient load, larger average bill size, COVID-related projects and the opening of a new wing in Malaysia.
  • Group EBITDA also jumped by 64.4% y-o-y to S$109.7m on the back of better operating leverage amid a 38.8% y-o-y rise in revenue to a record high of S$333.7m.
  • In line with the stellar results, Thomson Medical declared a special dividend of 0.115 cent for FY22, up from 0.015 cent last year.

Growing Bigger Market Share in Obstetrics

  • Looking ahead, Thomson Medical will focus on the execution of its network expansion plan with the opening of new centres and clinics in Singapore. The group recently expanded its Thomson Chinese Medicine services following the addition of a fourth clinic in Novena. With the transition to an endemic phase of COVID-19, management is seeing an improving trend of in-patient loads at its hospital.
  • We understand that its paediatric business has also ramped up in to a healthy level due to pent-up demand. Concurrently, Thomson Medical will continue to support the government in managing vaccination centres and Transitional Care Facilities.

Opens New Expansion Wing at THKD

  • In Malaysia, Thomson Medical expects sustained recovery in patient volumes and case intensity handled especially in the fertility business along with the borders reopening. Meanwhile, its expansion project at Thomson Hospital Kota Damansara (THKD) has been completed and the Certificate of Completion and Compliance had already been obtained.
  • According to management, the hospital is opening the new wing in phases and had commenced operations in 3Q22.

Tapping Technology for Healthcare Services

  • Despite its relatively high net gearing of 0.77x, Thomson Medical is confident that its healthy cash balance of S$161.6m should provide it with sufficient funds to see through its committed growth plans and seize any new growth areas. In particular, management sees huge opportunities to deploy data analytics to enhance quality of patient care, and to develop new business verticals.
  • Valuation wise, Thomson Medical's share price is trading at > 40x FY22A P/E.
  • There is currently no broker covering Thomson Medical.

Source: Maybank Research - 23 Sep 2022

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Thomson Medical 0.078 0.00 (0.00%) 2,987,200 

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