COMPANY RIC BROKER RATING (PVS) TARGET PRICE (PVS) HEALTHWAY DMG BUY (BUY) S$0.30 (S$0.30)
MEDICAL
STATEMENT:
Former remiser king, Lim Eng Hock (also known as Peter Lim), has increased his deemed stake in Healthway Medical. Mr. Lim bought 14.6 million Healthway shares from the open market, at S$0.15 each, through Kestrel Capital Partners Pte Ltd. This brings his deemed interest to 5.75 percent from 4.96 percent. Mr. Lim is known to be a savvy investor, and we think this would attract more interest in this stock.
We believe that Healthway has sound fundamentals and it is on track to grow its business. It recently expanded its specialist and wellness services in several areas, positioning itself as a leading specialist healthcare provider.
Its expansion plans in Shanghai are also on track, which would pave the way for more medical centres in other key cities in China. Hence, we are maintaining our view there is still value in Healthway, as its expansion is expected to boost growth. We are estimating earnings of S$16.0 million ($11.32 million) and S$27.0 million in financial year 2010 and 2011 respectively. At S$0.155, the stock is trading at 17 times 2010 financial year earnings.
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