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

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<a href="https://www.smartkarma.com/entities/ump-healthcare-holdings-ltd" target="_blank" rel="noopener">UMP Healthcare (722 HK)</a> will report its results in late February. We estimate low single-digit revenue growth of 3% YoY, in line with the past two semiannuals.</li>
<li>We flagged cost-cutting initiatives in <a href="https://www.smartkarma.com/insights/ump-healthcare-722-hk-postcard-from-hong-kong-and-webinar-updates" target="_blank" data-smartkarma-citation="insights:166790" rel="noopener">UMP Healthcare (722 HK): Postcard From Hong Kong and Webinar Updates</a>, which would result in 25% YoY profit growth. </li>
<li>Trading at 6.4x FY25e PE, with a 10% dividend yield and 85% of the market capitalization in net cash and investments, the stock has the potential to double. </li>
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UMP Healthcare (722 HK) will report its results in late February. We estimate low single-digit revenue growth of 3% YoY, in line with the past two semiannuals.
We flagged cost-cutting initiatives in UMP Healthcare (722 HK): Postcard From Hong Kong and Webinar Updates, which would result in 25% YoY profit growth. 
Trading at 6.4x FY25e PE, with a 10% dividend yield and 85% of the market capitalization in net cash and investments, the stock has the potential to double. 


UMP Healthcare (722 HK): Earnings Preview for H1 FY25

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<li>We met with <a href="https://www.smartkarma.com/entities/ump-healthcare-holdings-ltd" target="_blank" rel="noopener">UMP Healthcare (722 HK)</a> in Hong Kong. We believe management's cost control initiatives are bearing fruit and will see an inflection in earnings in FY25. </li>
<li>The weak consumption sentiment is setting a landscape for asset disposals, such as <a href="https://www.smartkarma.com/entities/ec-healthcare" target="_blank" rel="noopener">EC Healthcare (2138 HK)</a> 's <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/1106/2024110601562.pdf" target="_blank" rel="noopener">436 mn HKD</a> disposal of medical imaging to AIA. </li>
<li>We believe the company is a multi-bagger trading at 6.8x PE FY25e. It has ~80% of its market cap in cash (260+ mn HKD) and a ~10% dividend yield. </li>
</ul>


We met with UMP Healthcare (722 HK) in Hong Kong. We believe management's cost control initiatives are bearing fruit and will see an inflection in earnings in FY25. 
The weak consumption sentiment is setting a landscape for asset disposals, such as EC Healthcare (2138 HK) 's 436 mn HKD disposal of medical imaging to AIA. 
We believe the company is a multi-bagger trading at 6.8x PE FY25e. It has ~80% of its market cap in cash (260+ mn HKD) and a ~10% dividend yield. 


UMP Healthcare (722 HK): Postcard From Hong Kong and Webinar Updates

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<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

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<p>For our next Corporate Webinar, we are glad to welcome UMP Healthcare’s Chief Financial Officer and Company Secretary, Patrick Cheung. </p>
<p>In the upcoming webinar, Patrick will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, <a href="https://www.smartkarma.com/profiles/sameer-taneja-a0539e0c-84dd-4e66-9c40-6e598edfb4c5/analysis" target="_blank" rel="noopener">Sameer Taneja</a>. The Corporate Webinar will include a live Q&amp;A session.</p>
<h3>The webinar will be hosted on Wednesday, 23 October 2024, 15:00 SGT/HKT.</h3>
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<h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=81201150118" target="_blank" rel="noopener">Register for the Webinar here</a></h2>
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<h3>About UMP Healthcare</h3>
<div>Founded in 1990, UMP Healthcare is a medical group listed on the main board of the Hong Kong Stock Exchange (stock code 722. HK) and is one of the leading comprehensive healthcare service platforms in the Hong Kong market. They are committed to "providing comprehensive, diversified, and coordinated care for everyone" by creating a network of high-quality and effective medical services for patients, payers, providers, and partners.</div>
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<div>Along with providing healthcare services that address a wide range of individual needs, UMP closely works with more than 2,000 local and international businesses and insurance organizations to establish and administer corporate healthcare benefit programs for members. The medical service network spans over 1,000 self-owned and affiliated institutions across Hong Kong, Macau, and Mainland China, offering services such as family medicine, specialist consultation, dental care, diagnostic imaging and laboratory testing, preventive medicine and health examination, physical therapy, day surgery, and endoscopy, among others. In 2024, the annual volume of outpatient visits under UMP exceeded 1.3 million.</div>

For our next Corporate Webinar, we are glad to welcome UMP Healthcare’s Chief Financial Officer and Company Secretary, Patrick Cheung. 
In the upcoming webinar, Patrick will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Sameer Taneja. The Corporate Webinar will include a live Q&amp;A session.
The webinar will be hosted on Wednesday, 23 October 2024, 15:00 SGT/HKT.



























Register for the Webinar here



























About UMP Healthcare
Founded in 1990, UMP Healthcare is a medical group listed on the main board of the Hong Kong Stock Exchange (stock code 722. HK) and is one of the leading comprehensive healthcare service platforms in the Hong Kong market. They are committed to "providing comprehensive, diversified, and coordinated care for everyone" by creating a network of high-quality and effective medical services for patients, payers, providers, and partners.
 
Along with providing healthcare services that address a wide range of individual needs, UMP closely works with more than 2,000 local and international businesses and insurance organizations to establish and administer corporate healthcare benefit programs for members. The medical service network spans over 1,000 self-owned and affiliated institutions across Hong Kong, Macau, and Mainland China, offering services such as family medicine, specialist consultation, dental care, diagnostic imaging and laboratory testing, preventive medicine and health examination, physical therapy, day surgery, and endoscopy, among others. In 2024, the annual volume of outpatient visits under UMP exceeded 1.3 million.

Smartkarma Corporate Webinar | UMP Healthcare: Undervalued Gem in Hong Kong's Healthcare Market

<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

Hong Kong

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

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UMP Healthcare (722 HK)