Background
Thomson Medical Group (TMG) is a regional healthcare group that operates 3 tertiary hospitals with 757 licensed beds in Singapore, Malaysia and Vietnam. It also runs specialist medical clinics and diagnostic imaging centres in Singapore and Malaysia. TMG owns 1mn sq ft freehold land in Johor Bahru, Malaysia, which could be developed into an integrated health and wellness city, including a medical hub under 70%-owned TMC Life Sciences Bhd (TLS).
Highlights
Initiate coverage with a Buy recommendation and TP of S$0.066
Our TP is based on the sum-of-the-parts valuation methodology. The healthcare operations are valued at an industry average of 12.5x FY25e EV/EBITDA. We estimate the 1mn sq ft of freehold land at Iskandar, Malaysia, could reap a development gain of S$1.1bn.
Background
TMG owns and operates three tertiary hospitals. These include the flagship women hospital, Thomson Medical Centre (TMC) in Singapore, Thomson Hospital Kota Damansara in Kota Damansara, Malaysia held under 70%-owned TMC Life Sciences Bhd (TLS), and Franco-Vietnam Hospital (FV) in Ho Chi Minh City, Vietnam which was acquired in Dec 2023. The hospitals have a total 757 licensed beds.
It also runs a chain of specialist medical centres and diagnostic centres in Singapore, fertility centres in Malaysia, and chiropractic clinics in Vietnam.
TMG owns 1m sq ft of freehold land in Iskandar, Malaysia, and Johor Bahru City Centre. It plans to develop these areas into an integrated health and wellness city. TLS also plans to develop Thomson Iskandar Medical Hub with 500 beds in Iskandar.
Singapore
Established in 1979, Thomson Medical Centre is one of the largest private providers of healthcare services for women and children in Singapore. It also operates a network of specialist medical clinics and facilities providing diagnostic imaging, gynaecological oncology, specialist dermatology and Traditional Chinese Medicine.
Singapore has been the key earnings pillar, with the highest healthcare expenditure per capita in Southeast Asia and growing at a 5-year CAGR of 5.7% (Figure 9 & Figure 10). TMG also enjoyed a bump in profits in the last two years from government contracts to manage vaccination centres and Transitional Care Facilities. These jobs tapered off at end-2023. We expect Singapore’s FY24e revenue to return to FY21’s level.
Source: Phillip Capital Research - 25 Mar 2024
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Created by traderhub8 | Jun 03, 2024