Company Overview
Link to StockFacts company page Link to Clearbridge Health’s IPO Market Update |
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1. What are some notable developments that Clearbridge Health’s shareholders can look forward to?
• In FY18, Clearbridge Health achieved four consecutive quarters of growth which resulted in a 20-fold YoY revenue growth. We think this is a strong reflection of the success of our regional expansion through organic growth and an EBITDA-focused strategy. We expect this growth trajectory to continue as the cumulative effects of our precision medicine platform take shape.
• Clearbridge Health is moving towards positive EBITDA territory on the back of contributions from various strategic acquisitions as well as organic growth, hence we believe that FY19 will be the inflection point for us.
2. What are some of Clearbridge Health’s main business segments and their growth drivers?
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1. Medical Clinics/Centres (c.48% of FY18 revenue) – Currently operates two groups of clinics (1 SG, 1 HK), 1 paediatric clinic (in MY), a Clearbridge Medical Centre and 2 satellite clinics (in PH). The Group is also in the process of acquiring a majority stake in 9 Singapore dental clinics under the brand “Dental Focus”. The Group aims to leverage on its existing growing network to unlock economies of scale and to continue on an earnings-accretion strategy in expanding its clinical presence across Southeast Asia. |
3. What is management’s vision for Clearbridge Health and its goals to achieve it?
CEO Jeremy Yee joined Clearbridge Health in May 2017. He was previously CEO of Cordlife Group.
NextInsight file photo• Our vision is to create a precision medicine platform that empowers clinicians and healthcare professionals to make more reliable and accurate and reliable diagnoses, provide insights to disease management, and tailor personalised prevention and timely treatment programmes for patients.
• We aim to bring precision medicine to the masses via a distribution model that makes it readily available and affordable (e.g. Philippines and Indonesia countries with national health insurance systems). Our technology agnostic approach allows us to adopt the most appropriate technology in each segment of our business and the products and services we offer.
4. How does Clearbridge Health plan to build its precision medicine platform in Asia?
• Our approach comprises data-driven clinical initiatives, collaborations with best-in-class technologies providers, and direct access to consumers via owned primary healthcare and specialist providers. We are growing the scale and scope of our operations in the region both organically and through EBITDA-focused acquisitions.
• We will continue to grow our presence in existing markets and look at new markets for growth. Currently on our radar are medical clinics/centres and healthcare systems in highly populous markets with growing middleincome groups such as Vietnam, Thailand, Myanmar, Philippines and Indonesia, to complement primary healthcare services with our diagnostic testing services.
• For our EBITDA-focused acquisitions, we will remain deliberately prudent in our expansion to ensure that each acquisition is in line with our corporate vision and strategy.
5. We note that Clearbridge Health has operations in Singapore, Malaysia, Indonesia as well as the Philippines, and services offered vary between the different regions. Why is this so?
• We provide healthcare services based on our analysis of each market’s needs and look for the best fit for each market. For example, Indonesia’s national health coverage programme reimburses diagnostic laboratories tests and renal care services. We took a controlling stake in two business entities that operate diagnostics laboratories and renal care centres in public hospitals across Indonesia, allowing us to tap into this market.
6. Some drivers of healthcare in Southeast Asia include an ageing population and rising affluence. How does Clearbridge Health intend to capitalise on this?
• Asia Pacific’s precision medicine market in 2018 was US$11.0bn1 and is anticipated to grow at a CAGR of 16.63% to hit US$20.9bn in 20232 , driven by a growing ageing population, increase in healthcare awareness and affluence levels, and increased adoption of digital healthcare.
• Given the potential for Asia Pacific to be one of the fastest growing precision medicine markets in the world, we believe Clearbridge Health is well-positioned to capitalise on this wave of growth by offering a diversified range of healthcare product and services that are innovative, cost-effective and easily accessible to patients across a broad footprint in Asia.
7. How does Clearbridge Health differentiate itself from its peers?
• We believe we are one of the first in Asia with a precision medicine platform centred on three highly complementary business units that cater to different stakeholders of the medical industry, from scientists, medical practitioners to lab services and direct access to patients. Our primary focus is on regional markets where healthcare services are reimbursed by national health insurance systems.
• We also have an experienced management team in the healthcare industry, which is advantageous in developing organic growth and identifying potential acquisition targets. The Group also places a strong emphasis on optimizing its capital structure for expansion plans and maintains an asset-light strategy to accelerate our growth.
8. What are some of the barriers to entry into different regional healthcare markets? How could Clearbridge Health maintain its strategic position?
• Healthcare markets vary across countries where regulations, processes and the economy are at different stages of development. An expanded geographical footprint may also lead to potential difficulties in integrating existing and new businesses such as the synergies, costs and administrative functions.
• The Group has to mitigate these challenges in managing and operating a significantly more extensive and more complex enterprise, including achieving the desired profitability or growth while managing language, cultural and geographical barriers.
• Our management team has a strong track record and extensive operating experience in the healthcare industry within Asia, and this is pivotal as we need to work closely with our team on the ground - joint venture partners, agents and distributors - to navigate local regulatory and cultural hurdles across Asia.
9. What is Clearbridge Health’s mergers & acquisitions (M&A) strategy?
• With a focus on precision medicine, we are continually on the lookout for new markets to penetrate while deepening our presence in existing markets. We believe our strong revenue growth in FY18 is a testament to our business model and M&A strategy, which we will prudently execute as we continue to be a disruptive force in our industry.
• Our M&A approach is to acquire profitable and cash-generating healthcare businesses in countries mentioned in Qn 4. We typically take a majority stake in the target company with the remaining stake held by an established local partner, to ensure interests with our partners are aligned.
• We are also mindful to acquire only EBITDA-positive healthcare entities, to ensure that each acquisition is able to contribute to the Group’s financial performance, thus creating a sustainable platform for future growth.
| 10. What is Clearbridge Health’s value proposition to its shareholders and potential investors? • Helmed by a highly experienced management team with a proven track record in Asia’s healthcare industry, we believe that the Group is a direct proxy to the defensive and high-growth healthcare industry in Asia. • We believe that we have achieved growth and performance over the past 15 months, starting with two medical clinics to a network of complementary healthcare businesses across Asia. In FY18 (full first year of operations), we achieved four consecutive quarters of topline growth and 20-fold YoY revenue growth – a validation of our organic growth and EBITDA-focused acquisition strategy. • In value creation and monetising our assets and investments, we have also spun off Biolidics Limited on SGX Catalist in Dec 2018, our cancer diagnostics associate company, to maximise returns for our shareholders. We believe we have a clear business roadmap to create new growth catalysts in high-growth healthcare markets within Asia and we believe FY19 will be an inflection point for the Group as we move towards positive EBITDA territory. |
First published on SGX website
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