Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Capital Markets

Fullerton Healthcare / Equity Capital Markets

The deal terms and final disclosures for the Fullerton Healthcare listing are now available. We will wrap up our discussion from our previous Insight <a href="https://www.smartkarma.com/insights/fullerton-healthcare-a-high-quality-ipo" target="_blank" data-smartkarma-citation="insights:5991">Fullerton Healthcare: A High-Quality IPO</a> with comments on the proposed valuation; use of proceeds; and some roadshow questions for management. We continue to think that this is a high-quality company and that an offer price in the lower end of the proposed range of S$1.52 - S$1.96 is an attractive entry point.

The deal terms and final disclosures for the Fullerton Healthcare listing are now available. We will wrap up our discussion from our previous Insight Fullerton Healthcare: A High-Quality IPO with comments on the proposed valuation; use of proceeds; and some roadshow questions for management. We continue to think that this is a high-quality company and that an offer price in the lower end of the proposed range of S$1.52 - S$1.96 is an attractive entry point.

Fullerton Healthcare reportedly plans to list on the SGX in the near future. The company provides both outpatient healthcare services and medical benefit management services to employers across the region. The business features relatively stable growth and profitability and low capital intensity. The main use of proceeds will be for acquisitions to enter new markets both by service line and country. We think that fair value is S$1.0 billion based on peers and is at the lower end of the bankers' DCF projections.
We will revisit this offering once the deal formally launches. This post focuses on the business, projections, valuation (in brief), management, risks, and some key investments.

Fullerton Healthcare reportedly plans to list on the SGX in the near future. The company provides both outpatient healthcare services and medical benefit management services to employers across the region. The business features relatively stable growth and profitability and low capital intensity. The main use of proceeds will be for acquisitions to enter new markets both by service line and country. We think that fair value is S$1.0 billion based on peers and is at the lower end of the bankers' DCF projections.
We will revisit this offering once the deal formally launches. This post focuses on the business, projections, valuation (in brief), management, risks, and some key investments.

Equity Bottom-Up

Modern Dental listed on the HKEX in December, and the lock-up expiry date is 14 June. The shares have declined by 18% from the listing price of HK$4.20 to a recent HK$3.45, so we don't expect any insider selling. Execution since the IPO has been mixed (2015 results missed estimates) while M&amp;A activity has been in line with expectations. Management has reiterated 2016 guidance recently. The shares look attractive at these levels considering:1) insider buying occurred 10-15% below these levels2) we had liked the IPO if priced at these levels

Modern Dental listed on the HKEX in December, and the lock-up expiry date is 14 June. The shares have declined by 18% from the listing price of HK$4.20 to a recent HK$3.45, so we don't expect any insider selling. Execution since the IPO has been mixed (2015 results missed estimates) while M&amp;A activity has been in line with expectations. Management has reiterated 2016 guidance recently. The shares look attractive at these levels considering:1) insider buying occurred 10-15% below these levels2) we had liked the IPO if priced at these levels  

Asia Economist and CEO, Centennial Asia Advisors

Manu Bhaskaran

Asia Economist and CEO

Centennial Asia Advisors

At Centennial Asia Advisors, we tell it like it is. We have no vested interests, no need for a China wall, and no reason to skew our outlook any other way. With over 30 years experience covering Asia’s political economy, you can be sure our conclusions and analyses are based on the unadulterated facts. Through years of fine-tuning our research methodologies, we deliver a quality of macroeconomic analysis few other houses can match.

Centennial Asia Advisors is an independent research and advisory firm that works with governments, multilateral institutions, financial firms and leading MNCs.

Economic Policy and Strategic Advisors

Macroeconomics

The death of <a href="http://www.rememberingleekuanyew.sg/" target="_blank">Lee Kuan Yew</a>&nbsp;takes away from Singapore the presence of the most important personality in its modern history and is a moment of deep sadness for all Singaporeans including those of us at <a href="http://www.centennialasia.com/" target="_blank">Centennial Asia</a>.His extraordinary leadership at crucial moments in Singapore&rsquo;s history - the traumatic merger and then separation with Malaysia, the confrontation with Indonesia, ethnic tensions, and countless economic challenges and crises - made what is Singapore today. His record of decisiveness and pragmatism and his success in creating strong institutions and a durable national consensus that unites the country mark him out from other leaders of developing nations.<blockquote>Some analysts have suggested that his passing could weaken Singapore, perhaps even create some political instability. The evidence suggests otherwise.</blockquote>

The death of Lee Kuan Yew&nbsp;takes away from Singapore the presence of the most important personality in its modern history and is a moment of deep sadness for all Singaporeans including those of us at Centennial Asia.His extraordinary leadership at crucial moments in Singapore&rsquo;s history - the traumatic merger and then separation with Malaysia, the confrontation with Indonesia, ethnic tensions, and countless economic challenges and crises - made what is Singapore today. His record of decisiveness and pragmatism and his success in creating strong institutions and a durable national consensus that unites the country mark him out from other leaders of developing nations.Some analysts have suggested that his passing could weaken Singapore, perhaps even create some political instability. The evidence suggests otherwise.

Singapore: Lee Kuan Yew's enduring legacy of strong institutions will see Singapore through

Founder of Innovation Research & Advisory firm, Lightbulb Capital

Daniel Liebau

Founder of Innovation Research & Advisory firm

Lightbulb Capital

Thematic (Sector/Industry)

Companies across different industries are building Innovation centers&nbsp; in Singapore, Hong Kong and other cities across Asia and the rest of the world.&nbsp; Some examples include <a target="_blank" href="http://aia-accelerator.com/">AIA</a>, <a target="_blank" href="http://www.3m.com.hk/intl/hk/english/in_hongkong/innovation_center.html">3M</a>, <a target="_blank" href="http://www.mis-asia.com/tech/industries/metlife-announces-futurelab-in-singapore/">MetLife</a> and <a target="_blank" href="https://www.edb.gov.sg/content/edb/en/news-and-events/news/2014-news/p-and-g-opens-250-million-innovation-centre.html">P&amp;G</a> amongst others.&nbsp;While this is a good step in the right direction there are 4 specific points that are worth considering to gauge if the initiative has a chance to create some optionality for future long term growth. Therefore, from an investment perspective it makes sense to evaluate Innovation initiatives in target companies with those points in mind.

Companies across different industries are building Innovation centers&nbsp; in Singapore, Hong Kong and other cities across Asia and the rest of the world.&nbsp;  Some examples include AIA, 3M, MetLife and P&amp;G amongst others.&nbsp;While this is a good step in the right direction there are 4 specific points that are worth considering to gauge if the initiative has a chance to create some optionality for future long term growth. Therefore, from an investment perspective it makes sense to evaluate Innovation initiatives in target companies with those points in mind. 

Can Innovation labs be assessed to pick stocks for your portfolio?

Singapore

Healthway Medical Corp. Ltd. provides outpatient medical services in Singapore. The Company offers care in the areas of family medicine, specialists care, dental and oral care and medical aesthetics.

ISEC Healthcare Ltd. provides eyecare (ophthalmology) services in Malaysia and Singapore. The Company provides clinical care, research and educational services. ISEC Healthcare operates across Malaysia and Singapore.

OUE Lippo Healthcare Limited ("OUELH") is a subsidiary company of OUE Limited ("OUE") and is listed on the Catalist Board of Singapore Exchange Securities Trading Limited.

OUELH provides high-quality and sustainable healthcare solutions through the acquisition, development, management, and operations of healthcare facilities across Asia. Leveraging on the strategic partnerships it has, OUELH continually seeks to expand its portfolio across the region.

Established in May 2001, Cordlife Group Limited ("Cordlife", together with its subsidiaries, the "Group") is a leading company dedicated to safeguarding the well-being of mother and child. The Group is listed on the Mainboard of the Singapore Exchange since 2012 and is a pioneer in private cord blood banking in Asia.

Cordlife owns the largest network of cord blood banks in Asia with full stem cell banking facilities in six key markets, namely Singapore, Hong Kong, Indonesia, India, Malaysia and the Philippines. In Singapore, Hong Kong, the Philippines and Indonesia, Cordlife operates the largest private cord blood banks and it is amongst the top three market leaders in India and Malaysia. In January 2018, Cordlife became the market leader in Hong Kong with the acquisition of the largest private cord blood bank, Healthbaby Biotech (Hong Kong) Co., Limited. Through its majority-owned subsidiary in Malaysia, Stemlife Berhad, Cordlife holds an indirect stake in Thailand's largest private cord blood bank, Thai Stemlife. Cordlife has also established its presence in Myanmar, Vietnam, Macau, Brunei and Bangladesh.

Beyond cord blood, cord lining and cord tissue banking, Cordlife offers a comprehensive suite of diagnostics services for the family including non-invasive prenatal testing, paediatric vision screening, newborn metabolic screening and family genetic screening services.  Quality and customer focus are amongst some of the cornerstones of Cordlife.

HC Surgical Specialists Limited operates as a medical services group. The Company focuses on the provision of endoscopic procedures, including gastroscopies and colonoscopies, and general surgery services with a focus on colorectal procedures. HC Surgical Specialists serves customers in Singapore.

AsiaMedic Limited is a healthcare provider that focuses on the management of clinical services in the fields of disease prevention, early illness detection, and advanced diagnostics. The Company provides clinical and management services in Singapore and Internationally.

Religare Health Trust is structured as a business trust and invests in medical and healthcare assets and services in Asia, Australasia and emerging markets.

Talkmed Group Limited provides medical oncology services to patients.

UG Healthcare Corporation Limited operates as a medical supply company. The Company manufactures and distributes surgical, vinyl and cleanroom gloves, face masks, and other medical disposables.

I'rom Group Co., Ltd. provides management services on clinical trials and staffing consulting services including providing nurses, pharmacists, and clinical pathologists to medical institutions as well as training medicalrelated staffs.  The Company also provides and leases facilities and finances for these who are to start their clinics.

Pacific Smiles Group Limited owns and operates dental centers. The Company's centers provide preventative care, diagnosis and treatment for patients with a broad range of dental care requirements.

Bionet Corp. is a cord blood bank.  The Company collects, processes, and cryopreserves the cord blood.

Thai Nakarin Hospital PCL operates the Thai Nakarin Hospital. The hospital provides 24-hour inpatient and outpatient services.

Mahachai Hospital Public Company Limited owns and operates Mahachai Hospital. Located in Samut Sakorn, a province adjacent to Bangkok, the Hospital has 180 inpatient beds and 17 diagnostic rooms for 880 outpatients daily.

Chiang Mai Ram Medical Business PLC operates hospital's in Thailand.

Hi-Clearance Inc. sells medical apparatus and medical materials. The Company's products include artificial kidneys, blood tubing sets, paunch flushers, dialysis solutions, erythropoietin and puncture needles, and biomedical materials, such as teeth protectors, artificial dermises, cardiac catheters and hepatic catheters.

Nippon Care Supply Co., Ltd. wholesales medical equipment to organizations which then offer it as rental products to the elderly.  The Company services any used rental products for recycling within the organizations.  Nippon Care Supply's line of rental products include electronic beds, wheelchairs, walking aids, sterilization equipment, and inspection devices.

Srivichai Vejvivat PCL operates a hospital that provides specialty health care services in Thailand.

Oriola-KD Oyj operates with in two business areas: Pharmaceutical Trade and Healthcare and Dental Trade.  The Company is active in Finland, Sweden, the Baltic countries.

Q & M Dental Group (Singapore) Limited operates dental clinics. The Company offers aesthetic, children's and general dentistry; fits crowns, dentures and braces; and offers bleeding gum treatment, gum surgery and oral surgery; and treats snoring and teeth grinding.

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Q & M Dental Group (Singapore) (QNM SP)

Final Points to Consider on Fullerton

The deal terms and final disclosures for the Fullerton Healthcare listing are now available. We will wrap up our discussion from our previous...

Kemp Dolliver, CFA

Fullerton Healthcare: A High-Quality IPO

Fullerton Healthcare reportedly plans to list on the SGX in the near future. The company provides both outpatient healthcare services and medical...

Kemp Dolliver, CFA

Modern Dental: Time to Re-Visit

Modern Dental listed on the HKEX in December, and the lock-up expiry date is 14 June. The shares have declined by 18% from the listing price of...

Kemp Dolliver, CFA

Singapore: Lee Kuan Yew's enduring legacy of strong institutions will see Singapore through

The death of Lee Kuan Yew takes away from Singapore the presence of the most important personality in its modern history and is a moment of deep...

Manu Bhaskaran

Can Innovation labs be assessed to pick stocks for your portfolio?

Companies across different industries are building Innovation centers in Singapore, Hong Kong and other cities across Asia and the rest of the...

Daniel Liebau

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