JT 8.2016This article by Jennifer Tan (left, Director, Research & Products,  Equities & Fixed Income, at the Singapore Exchange) was published in SGX's kopi-C: the Company brew series on 7 October 2015. The article is republished with permission.

ISECISEC Healthcare specializes in medical care for eyes. It has 19 specialist doctors at four locations in Malaysia and Singapore. (Photo: Company)

Growing up, Dr Lee Hung Ming remembers holding his grandmother’s hand and leading her around the house because she could not see.

“It was acute glaucoma. She turned blind first in one eye, and two weeks later, became blind in the other eye. She spent the next 40 years of her life in total darkness,” he recalled.

From her experience, Lee began to grasp the depths of anguish that accompany the loss of sight.

“Since then, I wanted to be a doctor, to specialise in ophthalmology. Of the five human senses, this is the most important. Once you lose your vision, you lose your bridge of communication to the world, and your independence.”

DrLeeHungMing
LQM000066I am excited about new technologies, but the welfare of my patients will always come first.

- Dr Lee Hung Ming
Executive Vice Chairman

ISEC Healthcare
(Photo: Company)

Kelantan-born Lee obtained his basic medical degree and Master of Medicine in ophthalmology from the National University of Singapore. He is also a Fellow of the Royal College of Surgeons of Edinburgh.

Within ophthalmology, Lee went on to develop sub-specialties in cataract and corneal refractive surgeries.

From 2000 to 2007, he was Head of Refractive Surgery in Tan Tock Seng Hospital, and took on the role of Clinical Director of the Vision Correction Centre at the National University Hospital.

In May 2007, Lee entered private practice by collaborating with Gleneagles Hospital to spearhead the Lee Hung Ming Eye Centre.

“I didn’t like to deal with life and death issues, but I was good in microsurgery. I liked the fact that with technological advances, a 15-minute procedure could turn darkness into brightness, and make a huge impact on someone’s life,” he said.


Forging Ahead

The jovial 51-year-old gets an adrenaline rush by pushing the boundaries of medical technology within safe limits.

“I am excited about new technologies, but the welfare of my patients will always come first.”

In 2003, he was the first surgeon in the world to perform the new wave-front guided LASIK using the iris-tracking technology developed by Bausch & Lomb. In 2004, he performed Singapore’s first bladeless LASIK. He also carried out the city-state’s first bladeless laser cataract surgery in 2012.

“Previously, to cut the flap on the cornea, we would use motorised blades. Now with the femtosecond laser, there’s increased safety, effectiveness and predictability,” he said.

 

LQM000066

Markets like Vietnam, with a population of 90 million, and Myanmar, with a population of 50 to 60 million, lack eye clinics.


- Dr Lee Hung Ming
Executive Vice Chairman

ISEC Healthcare

Femtosecond lasers emit light pulses of extremely short duration, which allow tissue to be cut more precisely, and with practically no heat generation.

“These are technologies that will bring the outcome for patients to another level. In medicine, we must always try to do things safer and better,” he added.

For Lee, medicine is very much a family business. His wife, previously his university sweetheart, is a General Practitioner who runs a chain of four clinics.

His two oldest daughters, 23 and 21, are studying medicine in the National University of Singapore. His third daughter, 17, is in junior college, and his son, 15, is in secondary school.

An optimist by nature, Lee believes life should be savoured and enjoyed.

“Of course there will always be ups and downs – it’s up to you how you deal with them. When the chips are down, you must believe that tomorrow will always be better.”

♦ Daily Satisfaction

It’s also important to enjoy what you do, he added.

“The satisfaction I get is a daily one. It’s really amazing to see a smile on the face of your patient after a successful operation, and they sometimes tell me: ‘Doctor, I can see your wrinkles clearly now’,” chortled Lee, whose youthful mien belies his age.

A foodie with a yen for travelling, Lee loves Japanese and French cuisine.

“My motto when it comes to food is KISS – keep it simple and sumptuous,” he grinned.

ISEC Healthcare

Stock Price

30c

Market Cap

$155.1 m

52-week High Low

24c - 34.5c

Dividend Yield

3.67%

PE Ratio

28.3x

Source: SGX StockFacts
(data as of 31 Jan 2017)

“During weekdays, I eat very simply – mostly fruits, veggies and home-cooked fare, but I reward myself with something special two to three times a week.”

As ISEC’s Executive Vice Chairman, Lee’s vision is to build the company into a pan-Asian ophthalmology practice. ISEC, or International Specialist Eye Centre, listed on SGX’s Catalist board last October.

“It’s a growth company. We want to provide compassionate, world-class eye care at affordable prices to the rest of Asia.”

ISEC plans to expand across the Causeway, including Malacca and Johor in southern Peninsula Malaysia, as well as Sabah and Sarawak in the east. It already has eye centres in Kuala Lumpur and Penang, and will open another in Sibu, Sarawak, by year-end or early next year.

The company will grow through greenfield investments – setting up new centres with experienced doctors – or mergers and acquisitions.

“We will have a strategy combining both greenfield, which will take longer, and M&A, which is faster. We will also focus on both mature and emerging markets,” he added.

ISEC Healthcare Doctor EquipmentISEC Healthcare's equipment. (Photo: Company)
Over the next five years, ISEC plans to enter Vietnam, Myanmar, Indonesia, Taiwan, Philippines and China.

“Markets like Vietnam, with a population of 90 million, and Myanmar, with a population of 50 to 60 million, lack eye clinics,” he said.

ISEC is already in talks with potential partners, and a “palatable” price-earnings ratio for a suitable acquisition would range from 10 to 12 times, depending on size and potential, Lee said.

“We will not overpay, we’re very prudent in our strategy. One advantage is that we have the expertise – our colleagues are all key opinion leaders in their fields.”


Branding and Scale


Potential partners also like ISEC’s brand name, its economies of scale, and the training it can provide across ophthalmological sub-specialties.

“We have funds to acquire the latest medical technologies in the market. We are also able to leverage our size, reaping economies of scale in the purchase of equipment, machines, lenses and disposables,” he added.

LQM000066 Ophthalmology deals with age-related conditions, and many of our markets have ageing populations. Macroeconomic drivers in the region, including rising income levels and medical tourism, will also continue to boost private healthcare demand. 

- Dr Lee Hung Ming
Executive Vice Chairman

ISEC Healthcare

Diversification may also be on the cards.

“Eyes are our core business but we may want to diversify into other areas which have synergies, such as general medicine. GPs can refer cases to our eye centres in both Singapore and the region.”

A keen sportsman in his younger days, Lee has a passion for badminton and running. “Medicine and sports share similar principles. There are five Ps –Perseverance, Passion, Professionalism, Practice and Perfection,” he smiled.

Despite his happy-go-lucky disposition, Lee still frets about his patients from time to time.

“I think a lot about how to turn my patients’ conditions around, like helping them save or recover their sight. I also mull over our M&A strategy – what’s the best way to win over potential targets and get them to share our vision,” he said.

The future looks bright, thanks to high entry barriers and robust growth prospects.

“Ophthalmology deals with age-related conditions, and many of our markets have ageing populations. Macroeconomic drivers in the region, including rising income levels and medical tourism, will also continue to boost private healthcare demand.”

Financial results

Year ended 31 Dec 
(SS$ 000)
FY2015 FY2014 FY2013 FY2012
Revenue 26,690 21,997 17,537 15,089
Gross Profit 11,917 9,582 6,870 5,357
Net Profit  2,760 1,967 2,684 1,838

Quarter ended 30 Sep (SS$ 000) 3QFY2016 3QFY2015 y-o-y chg
Revenue 7,416 6,286 18%
Profit before tax 1,972 944 109%
Profit attributable to shareholders 1,679 680 147%

Source: Company data




Outlook & Risks
    • The Group believes it will benefit from expected increased demand for ophthalmology services in Malaysia and Singapore, likely driven by the ageing population, increased awareness of eye disorders, rising income levels, increased uptake of private insurance, and growth of medical tourism.
    • The Group will continue to expand in China, India, Myanmar, the Philippines, Taiwan and Vietnam , which have potential due to increased private healthcare spending.
    • The Group aims to expand its regional business to a size where there is a healthy and diverse mix of revenue streams from various geographical markets.


ISEC Healthcare

ISEC Healthcare provides specialist medical eye care services with 19 specialist doctors at four locations in Malaysia and Singapore. The company offers a range of tertiary specialty ophthalmology services in the areas of cataract and intraocular lens implants, refractive surgery, vitreous and retinal diseases, adult strabismus and paediatric ophthalmology, glaucoma diagnostics and therapeutics, medical retinal diseases, uveitis, and optometry and orthoptics, as well as cornea, external eye diseases, anterior, oculoplastics, facial cosmetics, and aesthetics surgery. In the last quarter, Isec experienced a 18% YoY increase in total revenue, from S$6.3 million in 3Q2015 to S$7.4 million in 3Q2016.

The company website is: www.isechealthcare.com.

Click here for the company's StockFacts page.

For its results for the third quarter ended 30 Sep 2016, click here.

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