Market Dialogue series, and is republished with permission.This article by Jennifer Tan appeared in SGX's
|For medical entrepreneur Dr Beng Teck Liang, taking the road less travelled nearly two decades ago has made a difference - and a serendipitous one at that.
The scion of an urologist, Beng began his career as a Medical Officer with Singapore's Ministry of Health in 1996, after graduating from the UK's University of Manchester Medical School.
"Although I was trained as a doctor, I wanted something more, so I decided to take a different path from my peers, and move from medicine to business," said the Chief Executive Officer of SGX-listed healthcare services provider Singapore Medical Group Ltd (SMG).
So he retooled himself with a Master's in Business Administration from the University of Chicago's Booth School of Business and a General Management Programme from Harvard Business School.
After spending the next decade managing multi-billion dollar businesses in information technology and healthcare across Asia Pacific for multinational corporations Hewlett-Packard and General Electric, Beng was ready once again to steer in a new direction.
Mover & Shaker
"I wanted to build something for myself. And when my partners and I saw the opportunity with SMG at that time, we decided to go for it," he recalled. "We launched a takeover and general offer for the company in 2013, and the rest is, undoubtedly, a beautiful history."
However, the milestones that SMG achieved in the succeeding seven years did not come easy - hard decisions and sleepless nights were inevitable.
"SMG had seen better days - its reputation was marred by controversy, business was shrinking, and we were months away from going broke. The stakes were really high at the time," Beng recalled.
"We had to reorganise teams, cut costs, retrench or fire staff, before we could grow again. During the first year, I was constantly asking myself, What did I get myself into? Am I really going to make this work?"
Determination and discipline, as well as biting not one, but several bullets, eventually yielded results. "We managed to turn around, slowly but surely, and looking back now, there's a tremendous sense of satisfaction," he added.
And the proof, as they say, is in the pudding: For the year ended 31 December 2019, SMG reported a 11.3% year-over-year jump in revenue to a record S$94.7 million, driven by growth across all business segments.
Operating cash flows rose to S$25.7 million for the year from S$16.8 million in FY2018.
Today, SMG has a market capitalisation of more than S$120 million, up six-fold from its value of about S$20 million before the takeover.
Incorporated in 2005 and listed on Singapore Exchange since 2009, SMG is a private specialist healthcare provider, with a comprehensive range of multidisciplinary specialties and an extensive network of Specialist and Associate doctors in clinics across Singapore.
SMG's practices can be found in both central and suburban locations, including Paragon Medical Centre, Mount Elizabeth Medical Centre, Gleneagles Medical Centre, Mount Alvernia Medical Centre, as well as Bishan, Bedok, Toa Payoh and Punggol. Its specialties include Aesthetics, Cardiology, Dentistry, Medical Oncology, Obstetrics & Gynaecology, Paediatrics, as well as Plastic and Reconstruction Surgery.
Right from the start, Beng's vision for SMG was crystal-clear: Export the Singapore brand of healthcare - which is well-loved and well-respected in the region - beyond domestic shores.
"Apart from the biggest players in this space, like Parkway Pantai and Raffles Medical Group, there are no small and medium companies who have a significant pan-Asian presence."
SMG aims to change that. Today, it has an expanding footprint in Indonesia, a network of clinics in Vietnam, and a robust in-vitro fertilisation (IVF) business in Australia. "We were ahead of our peers in terms of taking that leap and targeting the markets, which are traditional sources of medical tourists in the region," Beng said.
"Singapore's share of the region's medical tourism pie has been declining - we knew it would end at some point - so our goal was to bring the best-quality healthcare over to these countries. And I think we have made a lot of progress in achieving that."
Apart from its regional footprint, the Group has also differentiated itself from competitors through its diversification strategy. "Our specialties cut across five verticals - cancer, aesthetics, paediatrics, diagnostics, as well as obstetrics and gynaecology - and we're a significant player in each vertical."
SMG has also established a wide network of clinics across the city-state - of its 36 clinics, more than two-thirds are in the heartlands. It is incubating other businesses, while some potential verticals, like dental and ophthamology, have yet to grow to a significant size, Beng added.
In partnership with South Korean healthcare group CHA Health Systems, SMG will actively pursue projects in Vietnam, Singapore, Oceania and other key Pacific Rim markets to address burgeoning demand for fertility services, as the region's birth rates continue to decline.
The Group will also leverage CHA's expertise in anti-ageing care, as well as Korea's dermatology and aesthetics know-how, to boost its lead in various specialties, including oncology.
"The CHA-SMG partnership is expected to lay the foundation for Asia-Pacific's first dedicated platform for comprehensive wellness care, spanning the anti-ageing, beauty and preventive care spectrums," he noted.
Last year, an international unit of CHA invested S$50 million in SMG, raising its stake to 24.04% and becoming the Group's controlling shareholder.
These days, what keeps the 48-year-old awake in the wee hours is none other than the COVID-19 outbreak. "This virtual enemy has complicated our previously simple growth strategy, which revolved around how fast we could expand, which markets to venture into, and which partners we should bring on board," he said.
Lockdowns across the region have prevented ASEAN patients from carrying out their normal clinic visits. "COVID-19 will definitely impact us - about 20% to 30% of our business comes from ASEAN."
Thankfully, there is a silver lining. "We unveiled our telehealth business at the beginning of last year, and are starting to reap the benefits of that," he noted. Patients can seek specialist care via tele-consultation through SMG's HiDoc platform, which is easily accessed via a mobile app or website.
"We see huge opportunities in this space as medical tourism grinds to a halt from the pandemic."
Looking back, Beng attributes SMG's success to key decisions made seven years ago, one of them being a "Buy and Grow" strategy. "Acquisitions helped us scale up and provided a catalyst for growth. Our verticals doubled or tripled in size after we came across opportunities to acquire clinics, and acted quickly," he said.
"But we've never rested on our laurels - we're always mindful that we still need to maintain organic growth within our networks by opening new clinics and adding specialists."
Between 2015 and 2019, SMG added more than 20 specialists to its fold, reflecting an 85% increase to 48 from 26. The pool has been expanding every year, largely through acquisitions of medical practices and the hiring of specialists from the public healthcare sector.
At the end of the day, ushering SMG into its next phase of growth - and on the global stage, no less - is what keeps this father of two boys, aged 12 and 15, going.
This article was originally published on SGX website.
Singapore Medical Group Ltd
Incorporated in 2005 and listed on SGX since 2009, Singapore Medical Group (SMG) is a private specialist healthcare provider with a comprehensive range of multidisciplinary specialties, and an extensive network of Specialist and Associate doctors located in clinics across Singapore.
SMG's practices can be found at Paragon Medical Centre, Mount Elizabeth Medical Centre, Novena Medical Center, OUE Downtown Gallery, Gleneagles Medical Centre, Farrer Park Medical Centre@Connexion, and Mount Alvernia Medical Centre. Suburban locations include Bishan, Bedok, Toa Payoh and Punggol. Its specialties include Aesthetics, Cardiology, Dentistry, Medical Oncology, Obstetrics & Gynaecology, Paediatrics, as well as Plastic and Reconstruction Surgery.
The company website is: www.smg.sg