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Health Management International Doing ward rounds at Regency and Mahkota ■ We recently visited HMI’s hospitals (RSH and MMC) and also their neighbouring hospitals. ■ Ownership of private medical suites, well-equipped facilities and well-trained support staff are key to attracting and retaining good specialists at HMI, in our view. ■ Potential to grow its medical tourism market share, premised on development of more CoEs and sub-specialties, as well as deepening of local ties via 17 rep offices. ■ Healthy local patient demand underpinned by growing affluence, increasing insurance penetration and positive developments in Johor and Malacca. ■ Reiterate Add on HMI with a S$0.81 target price (DCF, 7% WACC)
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PACC Offshore Services Holdings: 2017 to remain weak PACC Offshore Services Holdings (POSH) reported a 42% YoY fall in revenue to US$34.3m and a net loss of US$18.4m in 1Q17, vs. net profit of US$4.5m in 1Q16. There were insignificant one-off items in the quarter. Most of the drop in revenue came from the offshore accommodation segment (-65% YoY to US$10m in 1Q17) as the SSAV POSH Xanadu completed its extended charter in Mar 2017 on reduced charter rate and two of the light construction vessels were not deployed in the quarter. The operating environment remains weak but POSH is likely to be a survivor of this crisis. Maintain HOLD with S$0.335 fair value estimate (based on 0.7x blended FY17/18F book).
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UOB KAYHIAN |
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Singapore Post (SPOST SP) Japan Post’s Big Impairment Hit And What To Expect For SingPost Japan Post recently disclosed a massive impairment charge on its largest acquisition in Australian logistic business, Toll Holdings, following poor performance. With a significant impairment risk to TradeGlobal looming, we believe Japan Post’s write-down could provide a preview of SPOST’s upcoming 4QFY17 results this Friday. Drawing parallels, we reckon SPOST may likely “wipe the slate clean” and book a large one-off impairment loss ahead of the new CEO coming on board in FY18. Maintain HOLD and SOTP target price of S$1.46. Entry price: S$1.30.
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Frasers Logistics & Industrial Trust Starts aligning for growth Maintain BUY, TP S$1.10. We believe that Frasers Logistics & Industrial Trust (FLT) remains attractive with a prospective yield of close to 7.0%. With an under-geared balance sheet, FLT has the ability to surprise on the upside through acquisitions, if executed from a myriad of opportunities available from its sponsor. Maintain BUY and TP of S$1.10.
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