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

Equity Bottom-Up

<ul>
<li>The company announced a settlement with its subsidiary of 18 mn HKD. This is material as we estimate that core profit for FY24 (June-end) would be 30-35 mn HKD. </li>
<li>This settlement will be paid in cash (tranches) as it involves<a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0708/2024070801013.pdf" target="_blank" rel="noopener"> making the company whole on a </a>vendor's profit guarantee shortfall. It boosts cash and investments &gt;340 mn HKD. </li>
<li>The stock is cheap, with net cash almost equal to the market capitalization, an 11x PE (on core profit), and a 9% dividend yield. </li>
</ul>


The company announced a settlement with its subsidiary of 18 mn HKD. This is material as we estimate that core profit for FY24 (June-end) would be 30-35 mn HKD. 
This settlement will be paid in cash (tranches) as it involves making the company whole on a vendor's profit guarantee shortfall. It boosts cash and investments &gt;340 mn HKD. 
The stock is cheap, with net cash almost equal to the market capitalization, an 11x PE (on core profit), and a 9% dividend yield. 


UMP Healthcare (722 HK): Parsing the Announcement on The Major One-Time Gain

<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

<ul>
<li>
<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> reported FY23 profits down 26% YoY at 55 mn HKD, impacted by preoperating expenses and an impairment cumulatively of 40 mn HKD. </li>
<li>A slow Q4 FY23 didn't help either; revenues came in flat HoH instead of up 10% as our expectations and costs increased resulting in margin compression. </li>
<li>We believe the worst is behind us. The stock trades at 5.9x FY24 PE, with ~50% of the market cap in cash and an FY24 dividend yield of 8.5%.</li>
</ul>



UMP Healthcare (722 HK) reported FY23 profits down 26% YoY at 55 mn HKD, impacted by preoperating expenses and an impairment cumulatively of 40 mn HKD. 
A slow Q4 FY23 didn't help either; revenues came in flat HoH instead of up 10% as our expectations and costs increased resulting in margin compression. 
We believe the worst is behind us. The stock trades at 5.9x FY24 PE, with ~50% of the market cap in cash and an FY24 dividend yield of 8.5%.


UMP Healthcare 722 HK: Weak Q4 Lead to A Disappointing FY23, Worst Behind Us

<ul>
<li>
<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> delivered a slow start to FY24, with revenues up 2.3% YoY and profits down 63% YoY, due to sluggish demand in Hong Kong. </li>
<li>The company cut dividend for H1 FY24 by 25% to 1.3 HKD cents/share. Net cash on the balance sheet remained healthy at 265 mn HKD representing 64% of market capitalization.</li>
<li>The company is implementing stringent cost control and we believe that a slow turnaround and a 9-10% dividend yield is very probable at these levels. </li>
</ul>



UMP Healthcare (722 HK) delivered a slow start to FY24, with revenues up 2.3% YoY and profits down 63% YoY, due to sluggish demand in Hong Kong. 
The company cut dividend for H1 FY24 by 25% to 1.3 HKD cents/share. Net cash on the balance sheet remained healthy at 265 mn HKD representing 64% of market capitalization.
The company is implementing stringent cost control and we believe that a slow turnaround and a 9-10% dividend yield is very probable at these levels. 


UMP Medical (722 HK): Slow H124, Deep Value, Execution Remains Key

<ul>
<li>We held a conference call with the Chief Investment Officer of <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>, Patrick Cheung, on the 19th of June, 2023. </li>
<li>The company continues to forge strategic alliances and collaborations, the latest being <a href="https://www.hkah.org.hk/en" target="_blank" rel="noopener">Hong Kong Adventist Hospital</a>, in addition to the recent partnerships with Pedder Health/Human Health Holdings (1410 HK).</li>
<li>The stock represents an excellent opportunity when trading at 6.6x PE FY23E with 44% of the market capitalization in cash and a 7.7% dividend yield on our numbers (50% payout).</li>
</ul>


We held a conference call with the Chief Investment Officer of UMP Healthcare (722 HK), Patrick Cheung, on the 19th of June, 2023. 
The company continues to forge strategic alliances and collaborations, the latest being Hong Kong Adventist Hospital, in addition to the recent partnerships with Pedder Health/Human Health Holdings (1410 HK).
The stock represents an excellent opportunity when trading at 6.6x PE FY23E with 44% of the market capitalization in cash and a 7.7% dividend yield on our numbers (50% payout).


UMP Healthcare Webinar Key Takeaways - Consolidation on the Investment Phase

Hong Kong

Bamboos Health Care Holdings provides healthcare staffing solutions. The Company offers customizable temporary staffing services to individuals and institutions.

Yunnan Energy International Co. Limited engages in distribution and related repair and maintenance services for analytical instruments and life science equipment. The Company provides chromatographs, spectrophotometers, electronic microscopes, life science and general laboratory instruments, and more. Yunnan Energy International conducts business in China.

Hang Chi Holdings Limited operates as a holding company. The Company, through its subsidiaries, provides medical care, rehabilitation, recreational activities arrangement, and other services. Hang Chi Holdings serves elders having lack of self-care abilities. Hang Chi Holdings offers its services in Hong Kong.

Medicskin Holdings Ltd is a medical skin care group that operates in Hong Kong. The company provides skin care services and treatments of skin diseases for their clients.

Hospital Corp of China Ltd. is a hospital operation and management group. The Company consolidate medical resources to provide medical services and treatment of diseases.

Wenzhou Kangning Hospital Co., Limited is a psychiatric healthcare group. The Company operate and manage a network of healthcare facilities across various regions in China.

Town Health International Medical Group Limited, through its subsidiaries, provides management services to medical and dental practitioners and licenses the Town Health Centre name.  The Company also provides healthcare and related services including general dental consultation services, paramedical services, operates health portals, and distributes health food products.

Arts Optical International Holdings Limited, through its subsidiaries, designs, manufactures, and sells optical products.

Wai Yuen Tong Medicine Holdings Limited, through its subsidiaries, manufactures and sells Chinese and western pharmaceutical products.

Uni-Bio Science Group Limited is a bio-science related business with focus on the research, development and commercialization of biopharmaceuticals through recombinant DNA and other technologies.

Cowealth Medical Holding Co., Ltd. specializes in Radiation Onchology and Diagnostic Clinical Laboratory Applications. Hematology Analyzers (including three part differential, and five part differential), Automatic Clinical Analyzer, Reflotron, Luminometer, Coagulation Analyzers; and other clinical laboratory applications, related service parts, consumables and reagen.

Won Ik Corp. imports and distributes medical instruments, raw materials used in semiconductor andelectronics manufacturing, and lighting products.  The Company also distributes Volvo automobile in the domestic market.

Arich Enterprise Co., Ltd. engages in the marketing and sale of pharmaceutical products. The Company offers prescription drugs, over the counter products, health consumer products, medical devices, disease prevention materials and supply chain services.

Wooridul Huebrain Ltd. engages in medical devices and equipment businesses.  The Company distributes medical equipment for neurosurgery, orthopedic surgery, and rehabilitation. The Company also manufactures spine align ergonomic chairs.

Excelsior Biopharma Inc. is a pharmaceutical company.

UCHIYAMA HOLDINGS Co., Ltd. is a holding company manages health care service, Karaoke shops and restaurants.

Kingworld Medicines Group Ltd. distributes branded imported pharmaceutical and healthcare products in the Peoples Republic of China. The Company distributes pharmaceuticals that include cough and phlegm relieving, gastrointestinal, vitamin, orthopedics, cardiovascular, influenza and others.

CARE TWENTYONE CORPORATION provides nursing care services for elderly. The Company provides its services on a dispatch care basis.  CARE TWENTYONE also leases and sells nursing equipment and adult diapers as well as operates a nursing home for the elderly.

Genome International Biomedical Co., Ltd is a fabless IC (Integrated Circuit) house. The Company designs ICs used in wireless products such as pager ICs, switching power ICs, and personal digital assistant (PDA) ICs.

Thonburi Medical Center PCL owns and operates Hospitals located in Bangkok, both hospitals have capacity of 400 in-patient beds.

UMP Healthcare Holdings Ltd. offers healthcare solutions provider. The Company provides services for medical and dental needs. UMP serves both contract and plan customers.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

UMP Healthcare (722 HK)