Health Management International (HMI)

[ghchua]

Hi Jacmar,

Doesn't make sense to me on the dividend part. They report their results in RM so why can't they pay dividend in RM? In this way, shareholders take the forex risk and they do not need to convert from RM to Sing. In fact, they should pay dividends if they make money and not only pay when forex is in their favour. It doesn't make sense at all.

Riverstone report their results in RM and they pay dividend in RM too. Yes, we lose when we convert RM to Sing but dividend is dividend as their revenue is mostly in RM and I don't expect them to hedge for me in Sing.

[Jacmar]

You are correct in that they can always pay out the div in RM. In this case its more of a case of mgt being conservative and trying to build up a war chest to go after expansion and m&a deals as it comes. not to forget both hospitals is currently on expansion mode and will need start up cost. one shareholder ask whether the expansions will require a rights issue and the answer is no and it will be funded from internal sources. on a side discussions they are also on the look out to do some small purchases ie clinics.

[valuebuddies]

Excuse me, when did we experience a period where MYR is strengthen against SGD for the past 50 years?

[Jacmar]

Excuse me, when did we experience a period where MYR is strengthen against SGD for the past 50 years?

You know the answer to this one and your point is? I think the same can be said for many other countries ie rupiah, rupee, Korean won etc. does it mean we exclude all these countries from our investment sphere? In the case of HMI, if the co is growing at 30-40% earnings /yr, what is the problem of 10% devaluation of the currency/yr vs S$? Sure there is always the possibility of the currency plunging to unbelievable level to banana currency status ala Venezuela, zambawi etc. I dont see this happening even during the AFC. The default position is capital control. Forex risk will always be there when you invest outside your home base. This is the risk that investors has to make.

[valuebuddies]

My point is that it is merely an excuse not to pay dividend because the ringgit is weak.

[Jacmar]

My point is that it is merely an excuse not to pay dividend because the ringgit is weak.

Answered this question on my earlier thread.

also noticed that the majority owner picked up another 300k @0.306 last week. IIRC this is the highest they ever paid. today good vol was traded at higher price. I suspect they dip into the mkt today again. wait for the announcement. This is a vote of confidence by majority owner.

[greengiraffe]

http://infopub.sgx.com/Apps?A=COW_CorpAn...esults.pdf

Gross profit margin improved to 34.2% from 30.8% in Q12016. The Group incurred RM 4.2 million unrealised foreign exchange losses due to weakening Malaysian ringgit, resulting in other losses of RM 3.3 million in Q12016.

HMI has non RM loans?

[cyclone]

HMI achieves strong operational performance for FY2016

Highlights :
* Strong year-on-year revenue growth of 15% and gross profit margin expands to 32.6%
* Re-design of initially planned medical block at Regency into hospital extension block due to strong patient demand
* Cash flow generated from operating activities jumped 65% y-o-y to RM 79.2 million in FY2016, due to better business performance and cash management.
* The Group’s balance sheet remained robust with cash and cash equivalents doubling to RM 78.9 million as at 30 June 2016 versus RM 39.1 million as at 30 June 2015. 
* Declares maiden dividend of 0.75 RM cents per share

http://infopub.sgx.com/Apps?A=COW_CorpAn...uddies.com

[corydorus]

Their profit reduced by 47%.
In-addition RM has weakened over 10% in this one year period.

[swang107]

Distorted by one-off tax items. Focusing on the underlying biz, its profit before tax was up 16%. Also a much improved net cash position YoY and payment of a cash dividend(after a long time) are more important markers to take note of.

"Tax expense increased by RM 16.5 million mainly due to one-off recognition of deferred tax assets of RM 9.0 million by RSHSB in the previous year and the subsequent utilisation of RM 5.5 million of deferred tax assets by RSHSB in the current financial year"-from full FY16 report