Healthway Medical Corporation

[propertyinvestor]

Eh, this is much better than Q&M, why ppl keep chasing Q&M?

[KopiKat]

Looking at their 2010 annual report

$177.742m intangible assets. Make up of $149.118m goodwill, $27.313m brand name, $0.193 computer software and $1,118m computer software development in progress.

So in their quest to expand and list(IPO) they incurred $149m of goodwill. Why do people pay a premium? well sometimes the new acquistions could reduce operation costs, economies of scales and etc.....But how do one figure out if they have not overpaid? My take is that one should amortised the goodwill within a certain timeframe. Maybe 3, 5 years or 10 years....depends on the company. Some companies are conservative so they depreciate faster. If the benefits from the acquistion is much higher, then the net profit after amortising the goodwill should be higher than before the acquision. For Healthway case, their amortisation for the 1st 9 mths of 2011 is $0.184m meaning they amortised just on the software part with nothing on the goodwill i suppose.

If one suppose they should amortise the goodwill in 10 years, then every year, the amortisation should be $14.9m which way way exceeds their 9mths earning of $3.865m....meaning they way way overpaid for the assets.

well one could argue it should not be done this way......well just treat it as arguing for the sake of argument^^

The auditors / mgmt must have been following this forum or their Balance Sheet is now a little bit stronger to do some write-down of Goodwill!

See SGX Annc today,

(4) The recognition of an impairment loss on intangible assets of $58.4 million was due to the impairment of goodwill. For the purpose of impairment testing, the management took into consideration the current economic climate and factored in a higher discount rate and lowered the terminal growth rates, despite the Group's cash generating units showing sustainable growth.

[money]

Healthway enjoys talking about growth in china.

At the end of the day, look at how much cash can they generate from their operations in singapore..

RIGHTS 20 May 2011 24 May 2011 OFFER OF 1 FOR 8 @ SGD 0.075
DIVIDEND 20 May 2010 24 May 2010 14 Jul 2010 SCRIP DIVSCHEME SGD 0.0012 ONE-TIER TAX
RIGHTS 19 Jan 2010 21 Jan 2010 OFFER OF 1 FOR 5 @ SGD 0.075
DIVIDEND 25 Sep 2009 29 Sep 2009 18 Nov 2009 SCRIP SGD 0.0012 ONE-TIER TAX
DIVIDEND 19 May 2009 21 May 2009 10 Jul 2009 SGD 0.0012 ONE-TIER TAX

They have taken more money from you than they have given you for the past few years. If they cant generate cash in singapore, what makes you think they can do a better job in china? (china also has its own doctors, the growth story in china is really overhyped)

[KopiKat]

Healthway enjoys talking about growth in china.
.
.
(china also has its own doctors, the growth story in china is really overhyped)

I stumbled on an interesting write-up on emerging markets hype. Extracts,

"It is clear that the total returns from buying stocks in low-growth countries has historically exceeded the return from buying stocks in high-growth economies."

[propertyinvestor]

Healthway enjoys talking about growth in china.
.
.
(china also has its own doctors, the growth story in china is really overhyped)

I stumbled on an interesting write-up on emerging markets hype. Extracts,

"It is clear that the total returns from buying stocks in low-growth countries has historically exceeded the return from buying stocks in high-growth economies."

Healthway's base is still in Singapore.

[money]

http://info.sgx.com/webcoranncatth.nsf/V...F00349835/$file/HMC310512.pdf?openelement

Now earnings is further diluted.. Shareholders lay out capital yet gets little in return. The listing status benefits the salaried doctors more than it benefits shareholders.

[propertyinvestor]

The proposed distribution of a dividend in specie in Healthway Medical Development is coming soon! This was announced last year and this is something all shareholders can look forward to as it unlocks value in its China and Malaysian investment

[Redtab]

[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

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

[yeokiwi]

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?

[wahkao]

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?

why do you ask this question?
PE numbers are usually pretty straight forward