SINGAPORE (Sept 19): Maybank Kim Eng likes Singapore O&G for its growth strategy of recruiting doctors with potential from the public sector and offering them access to the patient pool.
The move enhances its cross-selling platform to capture more patients.
The group has also launched a new complementary paediatric segment where one doctor joined in July while another will start in November.
SOG aims to hire at least two doctors yearly while exploring other segments such as fertility treatments and orthopaedic.
In an unrated report on Tuesday, analyst John Cheong says, “We note that the healthcare segment could face challenges from softer demand from medical tourists, potentially tighter regulations to prevent excessive charges and more emerging listed peers.”
Compared to the hospitals in neighbouring countries, Singapore’s charges are becoming more expensive.
In addition, the group posted a weaker 1H17, with earnings falling 6.4% to $4.1 million.
See: Singapore O&G 1H earnings fall 6.4% to $4.1 mil
The key reasons for this were lower live births as the Zika Virus outbreak in July 2016 caused many families to defer births, startup costs from two new specialists hired in mid-2016 and weaker performance in the dermatology segment due to slower medical tourism.
The management expects 2H17 to be better as the number of live births has normalised and the two new specialists are making progress.
See: Singapore O&G likely to recover from ‘temporary’ weakness
In addition, the group’s dermatology segment has also been seeing an improvement in patient load.
As at 11.30am, shares in SOG are trading 2 cents higher at 48 cents or 25.5 times earnings with a dividend yield of 3.3%.
Year to date, the stock has fallen 18.3%.
