Healthway Medical Corporation

(17-07-2014, 08:30 PM)yeokiwi Wrote:

Quote:What do you guys think about this stock?

Stock price as of 17 July 2014 is 0.060. P/E ratio: 4.45

First of all, how do you arrive at the PE?

based on AR 2013. Earning per share is 1.35. current price / earning per share = PE. For our case here. 0.060/0.0135 = 4.444444.

(17-07-2014, 08:39 PM)Redtab Wrote:

(17-07-2014, 08:30 PM)yeokiwi Wrote:

Quote:What do you guys think about this stock?

Stock price as of 17 July 2014 is 0.060. P/E ratio: 4.45

First of all, how do you arrive at the PE?

based on AR 2013. Earning per share is 1.35. current price / earning per share = PE. For our case here. 0.060/0.0135 = 4.444444.

I see. But the main bulk of earning came from the listing of IHC last year.
If we take the latest first quarter result alone, the earning is only 0.06cts. Therefore, the projected earning for FY15 is around 0.24cts which translates to PE=25?

Totally agree. Whoever wrote the sharesinv article failed to highlight the one-off gain last year which will not happen every time

Hi,

Just took a look at the 2013 AR - think there were sale of financial assets that are not directly related to daily operations, hence the profits attained last year could be a one-off. Havent really taken a look at other numbers though.

(17-07-2014, 08:06 PM)Redtab Wrote: [Image: Healthway+medical+logo.jpg]


What do you guys think about this stock?

Stock price as of 17 July 2014 is 0.060. P/E ratio: 4.45

Quote:Investment Merits

• Recession proof and defensive in nature.
  
• Establish its presence within the suburban areas of Singapore, building up a loyal base of returning visitors.
  
• Cheap Valuations even after stripping away their large pool of intangible assets.
  
• HMED’s operates from a centralised platform, and is able to capitalize on their large network of clinics. For example, HMED’s family healthcare patient that requires specialist care would be referred to HMED’s specialist division to be taken care of.
  
• Impending hazy conditions tend to drive up healthcare counters.
  

Investment Risk

• A substantial write off of goodwill could tilt liquidity ratios.
  
• High debt ratios as compared to its peers.
  

Recent article about Healthway Medical:
Is Healthway Medical really Undervalued ? – SharesInv.com

Hi,

i think the main thing about investmentmin healthway or any other company concerned is that how does the benefits(or profits) to the company translate to shareholder benefits(or rather minority shareholder benefit in most cases). in most cases, we are talking of price going up ie capital gains and/or dividend payout.

take a look at healthway dividends since listed:

Company Name Type Ex-Date Record Date Date Paid/Payable Particulars
HEALTHWAY MEDICAL CORP LTD ENTITL. 07 Jun 2013 11 Jun 2013 DNSPEC 82.29/1K
HEALTHWAY MEDICAL CORP LTD RIGHTS 20 May 2011 24 May 2011 OFFER OF 1 FOR 8 @ SGD 0.075
HEALTHWAY MEDICAL CORP LTD DIVIDEND 20 May 2010 24 May 2010 14 Jul 2010 SCRIP DIVSCHEME SGD 0.0012 ONE-TIER TAX
HEALTHWAY MEDICAL CORP LTD RIGHTS 19 Jan 2010 21 Jan 2010 OFFER OF 1 FOR 5 @ SGD 0.075
HEALTHWAY MEDICAL CORP LTD DIVIDEND 25 Sep 2009 29 Sep 2009 18 Nov 2009 SCRIP SGD 0.0012 ONE-TIER TAX
HEALTHWAY MEDICAL CORP LTD DIVIDEND 19 May 2009 21 May 2009 10 Jul 2009 SGD 0.0012 ONE-TIER TAX

highlights of this:

1) 2 rights issue in span of 1/2 decade
2) skipped dividend in 2012
3) no obvious trend of raised dividend
4) too short a listing history to make future extrapolstions.

also, to my knowledge, healthway has little hard asset backing, most of its shops are subject to tenancy. so even if this company does well,

1) hard to say if this is translated to shareholder benefits
2) 2 right issue in 5 years, no guarantee won't have 3rd right issue.

I will give healthway a miss.

gautam

(18-07-2014, 12:20 PM)gautam Wrote: Hi,

i think the main thing about investmentmin healthway or any other company concerned is that how does the benefits(or profits) to the company translate to shareholder benefits(or rather minority shareholder benefit in most cases). in most cases, we are talking of price going up ie capital gains and/or dividend payout.

Exactly... the business is wrapped under a listed structure. It is important that we understand the business but we also need to know how the structure works in terms of corporate actions and controlling shareholders' intent

Like an onion, there are 3 different layers: Assets, Business and Structure. Focusing on just either one is not going to be helpful

(18-07-2014, 01:07 PM)specuvestor Wrote:

(18-07-2014, 12:20 PM)gautam Wrote: Hi,

i think the main thing about investmentm in healthway or any other company concerned is that how does the benefits(or profits) to the company translate to shareholder benefits(or rather minority shareholder benefit in most cases). in most cases, we are talking of price going up ie capital gains and/or dividend payout.

Exactly... the business is wrapped under a listed structure. It is important that we understand the business but we also need to know how the structure works in terms of corporate actions and controlling shareholders' intent

Like an onion, there are 3 different layers: Assets, Business and Structure. Focusing on just either one is not going to be helpful

Hi Specuvestor

Is it possible to elaborate on the 3 different layers that you have mentioned? It's a good point that you raised, but I would like to learn more from you on this part.

Thanks in advance.

We are all sharing our expertise in this forum and learning from one another. I will learn about consumer products from you But its good to know that you are the second person who read between my lines and explicitly interested to know more

There are AT LEAST 3 layers in a complete analysis IMHO but roughly we can looks at the Asset, Business and Structure layer in general

Assets can be factory to property to internet site. At a certain volume it produces certain profitability. This is primarily the ROA which many value investors look at.

Encompassing this asset is a bigger layer called the business layer which many business minded investors including Buffett analyses which includes working capital, SG&A, positioning, bargaining power, porter's 5 forces etc. Sometimes u might need low ROA asset to support other parts of the business, for example SMRT having low ROA rail biz so that it can have high ROA advertising biz. Those who just focus on assets and ROA and concluding whether assets should be sold to improve ROA, or evaluating business on ex cash basis, etc is missing the point. Thats what happened during the boom years of sale and leaseback. They don't understand the business and just looking at the asset layer. This is the ROIC of the business.

3rd layer is the structure which often is done to benefit the major shareholders, from directors' remuneration to company registration in Caymen, to dividend payouts and leverage is part of this structure. This is where most analysts look at, ROE and DDM, without understanding the purpose of the structure. And like Gautam pointed out, it can be a superb business miserable to opmi. The more extreme case is the chinese internet structure that the offshore entity do not own the underlying assets but have economic interests linked to the business. This is also the layer where the legality issues apply at the holdco, which most of the time does not operate any of those business but owns stakes in it. Listed equity in itself is a "derivative"

So in order to understand what we are investing, when we buy the holdco that is wrapped within the listing framework, we need to understand how these 3 layers interact instead of purely focusing on assets and ending up in a value trap, or looking at a business like lion gold without knowing the assets, or investing in a cash rich s-chip without knowing the structural layer.

My 2cts

(20-07-2014, 10:01 AM)smalkmus Wrote:

(18-07-2014, 01:07 PM)specuvestor Wrote:

(18-07-2014, 12:20 PM)gautam Wrote: Hi,

i think the main thing about investmentm in healthway or any other company concerned is that how does the benefits(or profits) to the company translate to shareholder benefits(or rather minority shareholder benefit in most cases). in most cases, we are talking of price going up ie capital gains and/or dividend payout.

Exactly... the business is wrapped under a listed structure. It is important that we understand the business but we also need to know how the structure works in terms of corporate actions and controlling shareholders' intent

Like an onion, there are 3 different layers: Assets, Business and Structure. Focusing on just either one is not going to be helpful

Hi Specuvestor

Is it possible to elaborate on the 3 different layers that you have mentioned? It's a good point that you raised, but I would like to learn more from you on this part.

Thanks in advance.

Can anyone help me understand how to interpret HMC's 2013 AR?

Under the income statement pg 38, they have a other gain of 43 mil with a note #6.
Going to note 6, pg. 64, there was a loss of 13 mil and a gain of 56 mil due to reclassification from comprehensive income on disposal of available for sale financial assets (whatever that means). This results in a net of 43 mil gain. However, there was a note 26 attached to this 56 mil and under note 26, it says fair value reserve which is again due to reclassification from comprehensive income on disposal of available for sale financial assets. This time it's reported as a negative number.

1. So what exactly is this 56 mil reserve and why was there this reserve to begin with?

2. Where did this 56 mil come from? From sale of existing financial assets? Is the bottom line the sale of financial assets and eventually reported as other income?

3. Would it be correct to say that in 2013, MHC actually is in a deficit situation if I take off the other income of 43 mil?

Thanks.

In one complicated takeover, healthway is being acquired by IHC

http://infopub.sgx.com/FileOpen/Acquisit...eID=356769

Summary of case: IHC is buying all Healthway Medical shares at 0.10 by issuing shares of IHC to shareholders at the price of $0.45 for each IHC share. Interstingly, IHC shares are only selling at $0.295/$0.290 per share.

If adjusted, the takeover prices healthway shares at $0.065 per share vs curent market price of $0.055