Healthway’s        4Q09     net    profit  of   S$3.1m      (+35%      YoY)    was     in  line  with    our expectations. This was largely attributed to the maiden full year contribution from its   acquisition     of  several    practices     in  mid-08,     organic     growth     at  its  medical centres   and   the   expansion   of   its   clinic   network   during   the   year.

A   dividend   of  0.24 S¢ per share for FY09 was declared. It recently placed out 108m shares to  IFC and secured a US$15m loan from IFC. At the same time, it also placed out 85.9m shares to major shareholders. This would allow it to raise ~S$45m, the bulk of which would be used to fund its China expansion plans. We maintain our BUY      recommendation,           but   we    have     raised    our   TP    to   S$0.26     (previously S$0.21),      taking into   account     the   potential     growth     that   the   new    clinics   can generate, despite an enlarged share base. Balance sheet is healthy. As at end 4Q09, Healthway’s net gearing stands at 0.2x. In order to fund its China expansion plans, we do not rule out further fund raising activity.

Healthway   can   potentially   open   another   30   medical   centres   in   China.   It plans   to   open   another   6   medical   centres   in   Shanghai  in   FY10.  Our   previous report had assumed that Healthway did not use any of the additional funds (from the   placements   and   loan).   Here,   we   assume   that   majority   of   these   funds   are used for its expansion in China. Healthway had budgeted S$20m for Phase 1 of its   expansion,   leaving   it   with   ~S$25m   from   the   fund  raising.  We   estimate   that Healthway can possibly open at least another 30 medical centres over the next five   years   (or   6   new   centres   a   year).   This   would   fuel   earnings   growth   going forward.

TP raised to S$0.26. Based on our DCF approach, we arrive at a TP of S$0.26, supported  by   the   contribution   from   its   potential   new   medical   centres   in China from FY11, while keeping its Singapore expansion plans intact. Maintain BUY.

Article reproduced from DMG Partners dated 8^th March 2010

A good friend send the report to my email, so I don't have the link but i have uploaded it to yousendit.

Click the link to download and read the report yrself. Note: this link is valid for 7 days.

https://www.yousendit.com/download/THE3TkFwTlF0TW14dnc9PQ

NOTE: Analyst reports are just there to serve for a reference guide ONLY.

Cheers

oh really?? I'm glad to hear that... Thanks for the update. Btw, where you view their latest report?

wangwang828,

New DMG analyst report today on 8th March just re-rated Healthway to a target price of 26 cents from 21 cents, after factoring into the potential growth of the new clinics.

I just received the new report...

S$0.170   CLEANED OUT.

Refer to DRsubaru's FA & TA Analysis belOw.

WHEN  PARKWAY  takes Over HEALTHWAY,

regrets        Regrets        REgrets        REGrets        REGRets       REGREts        REGRETs        REGRETS        R E G R E T S       

ATTEND the EGM tomorrow  at The PINES CLUB.

MEET the people who are PULLING the STORM  TUG-Of-WAR

Will a major shareholder STEP IN to deRAIL the MANDATE?

Below is an analysis of Healthway from the Fundamental and Technical Analysis point of view. It is written in my personal capacity and is neither an article meant to induce market movement nor to entice people to trade in whatever directions.

First and foremost, a fair comparison needs to made with regards to other medical players in order for the analysis to be adequate. Let’s take a history tour. Healthway Medical was listed on the catalist board on 4^th July 2008. Now many would ask, why would such a big and exciting entity like HW list on catalist and not on mainboard? The exposure of a mainboard listing would be so great compared to catalist with most brokerages and analyst choosing most of the time to cover a mainboard listing. Well, the simple reason is HW as PROHIBITED FROM LISTING ON SGX MAINBOARD BECAUSE IT REQUIRES THE ACCOUNTS OF THE LAST 3 YEARS to be audited by the SAME ACCOUNTANCY FIRM. And one would know that the acquired entities have accounts maintained by different accounting firms. Yes, as simple as it can get. HW was following a SGX directive. Fastword to 4^th July 2010, in about 4 months, HW would have fufilled the SGX crieria and an upgrade to the mainboard is only eminent. It is only a matter of timing. No doubts, a mainboard does not change a valuation of a company but the greater visibility not just to the local investors and overseas investor bodes well to the future of HW. With all due respect to brokege house and analysts, once HW gets coverage from another 1-2 houses as compared to the current DMG, this would add upward pressure on the share price. This is all a logical deduction.

Secondly, in the BT article on 24^th Feb, 2010, the soon to be elected CEO of Parkway, Dr Tan See Leng mentioned “the organic growth is one key pillar although I wouldn’t rule out some form of M&A”. Now we have to understand here that Dr Tan See Leng was ex-CEO of HW before they sold off to BUPA. I would like to extrapolate this info a little further by saying that he has the drive and gumption to make this M&A happen….

Let’s try to see what are possible M&A targets? There are few basic assumptions that I would like to make. The entity has to be a medical player. It most likely is a strategic partner that complements rather than competes for the same slice of the pie. It most likely operates in the same strategic sphere of influence and that means in Asia, so I am excluding USA, EU and Ozzie partners. And last but not least it must be a company that is growing and can value add to the exisitng portfolio of their core business. Let’s zoom down on the medical players in Singapore. On the surface, immediately, a few are excluded based on their poor strategic alliance potential and earnings. Pacific Healthcare and Asia Medic is naturally poor candidates. Raffles Medical is pretty much  a competitior and not complemetary at all. Other smaller and niche players liike Singapore Medical Group, Q&M and TMC are also poor candidates for a M&A. Over the crossway, Qualitas Medical Group is listed on SGX and is hardly exciting. In Thailand, Bumrungrad is unlikely to sell out and after what happen to Shin Corp, there will naturally be some weariness. If you have been following me so far, there is only 1 logical deduction what is the potential M&A target. One is the largest private hospital provide in Asia and the other is the largest GP clinic chain in Singapore with the largest chain of private paediatric and orthopaedic specialists. The amount of cross referrals will be tremendous. The common interest in China as an emerging market is tilted in HW favour. Their latest director is from China and I would naturally deduce that he can add value to the operation in China. Some are worried that World Bank does not get the placement shares and what would happen to the madate on the China expansion of HW. I am of the opinion that World Bank is probably a passive investor rather than active ongoing partner who can really help HW expand, so even if the HW deal falls through, HW can can funding elsewhere. HW already has 2 clinics in China, Shanghai, Puxi and Pudong district and according to their announcements, are looking forward to add another 6-8 by the end of the year. This to me is phenomenon. Parkway paid USD 42 million for World Link to gain a foothold in China (http://www.zoominfo.com/people/Seah_Jonathan_1199331965.aspx)

Now, that was valued at closed to 50X the PE and that was just for 5 clinics. One must understand that the entry barrier to the China healthcare market is not so easy. Why would Raffles Medical Group still be squatting in Hong Kong after so many year? 10 years ago, they had 1-2 clinics in Hong Kong, now 10 years later tell me how many clinics do they have. So HW is the advantage in so many fronts. They did not have to overpay for achieving a presence in China and with or without World Bank endorsement, they will definitely march on. They have the ‘guangxi’ to succeed in the world’s biggest  emerging medical industry. First mover advantage is what HW has, just look at Raffles Medical squatting in HK and you can appreciate the vast difference in clout they have.So what if Raffles has GIC/Temasek as a investor, they are not given preference even though Singapore has SIP and Tianjin Eco Project. I give you an analogy, many years ago, when Buick and VW moved to China in the early days, they established a foothold that is still felt to this day and has left the late upstarts like Honda and Toyota clawing for a piece of the action. Why would Toyota and Honda being Japan MNCs and linked so close geograhically and with vastly superior technology compared to the Americans and Europeans not have a distinct advantage? 1 word ‘guangxi’. In the 19^th January press release to SGX, 6 new medical centres are earmarked to add to the exisiting 2, making a total of 8 in total by th end of the year. How many of these 6 are already being planned and at what stage of development, I do not know. But I would reckon that for a statement to be made like these and for the World Bank to take a step towards getting a placement share, these are definite concrete plans and not cheap talk plugged out of the air.

HW since its inception is growing from strength to strength. Healthway Medical’s profit has grown substantially for FY09 (compared to FY08) 59.5%. And I do feel that at this exciting phase of growth for the company, this could potentially be duplicated for many years to come when the China growth story bears fruit. I compared this to Raffles,a mature medical player though being flushed with cash does not appear at the current moment to have a viable expansion strategy which is visible. They have 50 plus million which is sitting there, hopefully some will be returned to shareholders via a special dividend. But HW has 100 million plus after the rights issue and after a successful placement hoepfully that can be invested to reap potentially greater benefits that what Raffles can hope to achieve.

So in summary, HW is poise to really take off and if the last couple of days of market action is anything to go by, we are in for a long flight up to space.