Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ec-healthcare" target="_blank" data-smartkarma-citation="entities:22630:1" rel="noopener">EC Healthcare (2138 HK)</a> reported muted FY24 result. While revenue increased 9% YoY to a record high of HK$4.2B, EBITDA and net profit declined 10% and 85%, YoY, respectively.</li>
<li>The reopening of borders saw a slower-than-anticipated recovery in revenue from Chinese Mainland medical tourism. The prevailing high interest rate, inflationary pressure, and economic uncertainties have made the operations challenging.</li>
<li>EC Healthcare shares plunged ~70% over the last one year. Although the company has long-term growth drivers and margin levers, there is short-term uncertainties over financial performance improvement.</li>
</ul>



EC Healthcare (2138 HK) reported muted FY24 result. While revenue increased 9% YoY to a record high of HK$4.2B, EBITDA and net profit declined 10% and 85%, YoY, respectively.
The reopening of borders saw a slower-than-anticipated recovery in revenue from Chinese Mainland medical tourism. The prevailing high interest rate, inflationary pressure, and economic uncertainties have made the operations challenging.
EC Healthcare shares plunged ~70% over the last one year. Although the company has long-term growth drivers and margin levers, there is short-term uncertainties over financial performance improvement.


EC Healthcare (2138 HK): Shares at Multi-Year Low; Still Not a Value Buying Opportunity

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<li>
<a href="https://www.smartkarma.com/entities/ec-healthcare" target="_blank" data-smartkarma-citation="entities:22630:1" rel="noopener">EC Healthcare (2138 HK)</a> expects to achieve a record-high sales volume of no less than HK$1.8 in H1FY23, representing a no less than 17% y/y increase.  </li>
<li>The company is optimistic about its business development as the Hong Kong government’s pandemic policy stance is heading towards “normalization” and recently further relaxed quarantine arrangements for inbound travelers.</li>
<li>With the economy reopening, the company is in a position to reap the benefit of M&amp;A worth HK$641 million completed in FY22.  </li>
</ul>



EC Healthcare (2138 HK) expects to achieve a record-high sales volume of no less than HK$1.8 in H1FY23, representing a no less than 17% y/y increase.  
The company is optimistic about its business development as the Hong Kong government’s pandemic policy stance is heading towards “normalization” and recently further relaxed quarantine arrangements for inbound travelers.
With the economy reopening, the company is in a position to reap the benefit of M&amp;A worth HK$641 million completed in FY22.  


EC Healthcare (2138 HK): Record High Sales in H1FY23; Medical Segment Remains Key Growth Driver

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ec-healthcare" target="_blank" data-smartkarma-citation="entities:22630:1" rel="noopener">EC Healthcare (2138 HK)'s</a> Chairman and CEO acquired 543,000 shares at an average price of HKD9.1943 per share, thereby increasing his stake to 61.17% of the issued share capital.</li>
<li>H1FY22 and preliminary results for Q3FY22 shows continued business recovery. Medical services, which contributes 52.5% of total revenue continue to be the key growth driver.</li>
<li>In January, EC Healthcare acquired 55% equity interest in Bayley &amp; Jackson Dental Surgeons Limited for HKD129 million. Bayley &amp; Jackson operates seven dental clinics in Hong Kong.</li>
</ul>



EC Healthcare (2138 HK)'s Chairman and CEO acquired 543,000 shares at an average price of HKD9.1943 per share, thereby increasing his stake to 61.17% of the issued share capital.
H1FY22 and preliminary results for Q3FY22 shows continued business recovery. Medical services, which contributes 52.5% of total revenue continue to be the key growth driver.
In January, EC Healthcare acquired 55% equity interest in Bayley &amp; Jackson Dental Surgeons Limited for HKD129 million. Bayley &amp; Jackson operates seven dental clinics in Hong Kong.


EC Healthcare (2138 HK): An Attractive Idea with Insider Buying and Continued Business Recovery

Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

<ul>
<li>We preview <a href="https://www.smartkarma.com/entities/ump-healthcare-holdings-ltd" target="_blank" data-smartkarma-citation="entities:21005:1" rel="noopener">UMP Healthcare (722 HK)</a>  earnings for FY24 (June-end), which will be declared in September, and our outlook for FY25. </li>
<li>The company has more than 300 mn HKD of net cash (almost 75% of its market cap), and even assuming a 20% dividend cut, it has an ~8% dividend yield.</li>
<li>On core earnings for FY24, we estimate that the stock trades at 12x PE( ex-cash 2.8x PE), with low-hanging fruit from streamlining the business in FY25. </li>
</ul>


We preview UMP Healthcare (722 HK)  earnings for FY24 (June-end), which will be declared in September, and our outlook for FY25. 
The company has more than 300 mn HKD of net cash (almost 75% of its market cap), and even assuming a 20% dividend cut, it has an ~8% dividend yield.
On core earnings for FY24, we estimate that the stock trades at 12x PE( ex-cash 2.8x PE), with low-hanging fruit from streamlining the business in FY25. 


UMP Healthcare (722 HK): Deep Value Turnaround in FY25

Perfect Medical Health / Equity Bottom-Up

<ul>
<li>We spoke with the management of <a href="https://www.smartkarma.com/entities/perfect-medical-health-management" target="_blank" data-smartkarma-citation="entities:3639:1" rel="noopener">Perfect Medical Health (1830 HK)</a>. The key highlight is a steady recovery for FY24e and an overall expansion of 60% in three years. </li>
<li>Expansion plans in HK (75% of revenue) have commenced, with ten centers opening over the year, adding to the existing 22 HK centers (one already opened in June 2023).</li>
<li>They also highlighted an aggressive long-term goal of making one bn HKD of profit by FY26 (Mkt cap: 4.8 bn HKD) and short-term guidance of 30-40% profit growth for FY24e. </li>
</ul>


We spoke with the management of Perfect Medical Health (1830 HK). The key highlight is a steady recovery for FY24e and an overall expansion of 60% in three years. 
Expansion plans in HK (75% of revenue) have commenced, with ten centers opening over the year, adding to the existing 22 HK centers (one already opened in June 2023).
They also highlighted an aggressive long-term goal of making one bn HKD of profit by FY26 (Mkt cap: 4.8 bn HKD) and short-term guidance of 30-40% profit growth for FY24e. 


Perfect Medical Management FY23 Concall: Highlights Bright Outlook for FY24, Aggressive Expansion

Hong Kong

EC Healthcare operates as a non-hospital medical service provider. The Company principally engages in the provision of medical, aesthetic medical, beauty and wellness services, and sale of skincare, healthcare and beauty products. EC Healthcare conducts businesses in Hong Kong, Macau, and Mainland China.

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EC Healthcare (2138 HK)