Singapore Medical Group

[mikh]

Here's what I can summarize and share on SG Medical.

It's on Catalist, with business split into 4 clusters: eye, aesthetics, sports and critical illness. The eye cluster contributed some 78% of profits for 2009. However the same eye cluster suffered slower sales in FY2009 and contributed in part to the Exec Chairman and CEO foregoing their 2 months contractual bonus. Results have since improved in the following 6 months.

In Oct 2010 it announced that it had entered into an MOU to form a JV (75% holding) in Mongolia and open a 50 bed tertiary hospital there.

Opinion: I do not see much synergy in its business and while one would have thought that aesthetics would make its money, it does not. We are still basically talking about profitability rather than about a business with a strong niche and product.

[Contrarian]

Nothing exceptional about this company. It is just riding on the medical tourism and Singapore demographics.

The solid performer is Raffles Medical. It's a classic buy, lock and forget company...

[RBM]

I am not vested in SG Medical. But I have had a recent look at this company. Key driver to do this was that some of their ratios appeared on initial inspection to be more appealing (viz. upside) than e.g. Q&M Dental, which currently appears to be trading on an eye-watering P/E > 40. I want to invest in something "medical", which is well managed and has potential upside. Strikes me that SG Medical is rather fragmented, merely an amalgamation of numerous medical practices with, as mikh states, little synergy between the disparate parts. What is the real strategy here? What will differentiate them? And the Mongolian foray introduces political risk. I also found SG Medicals Investor Relations material poor - I have seen a more complete offering from other Catalist companies. I'll be staying clear.

RBM

[RBM]

Something I should have added to my message of yesterday. If SMG self-insure and they have no recourse/appeal, then the following could constitute a major hit (in terms of proportion) to SMG's near term profit ............

QUOTE
--------------------------------------------------------------------------------

Title:

Man wins damages after failed Lasik op

Source: Straits Times

Author: K.C. Vijayan

THE High Court has ordered the Singapore Medical Group, the Lasik Surgery Clinic and eye surgeon Marc Tay to pay damages, after Lasik procedures to correct a patient's short-sightedness left him with blurred vision.

Assistant Registrar Then Ling issued the order yesterday after all three failed to file their defence against the claims made by the plaintiff, Mr Enoch Ang.

Mr Ang, 24, a third-year undergraduate, had sought special damages from the three and additional exemplary damages from the medical group and the clinic.

He is seeking about $900,000 in special damages which includes future medical expenses and future loss of earnings as a result of his eye condition, according to court papers filed.

His lawyers Edmund Kronenburg and Lye Hui Xian of Braddell Brothers argued that the Singapore Medical Group and Lasik Surgery Clinic should pay additional exemplary damages, as they knew Dr Tay performed Lasik surgery on his client while knowing he was not a suitable patient and without informing him of all the risks involved.

The lawyers alleged that the firm and clinic chose not to implement safety measures to oversee Dr Tay in his work, possibly because doing so would have led to decreased patient volume and decreased revenue from Lasik, according to the court papers filed.

Mr Ang went to the Lasik Surgery Clinic in October 2007 for a medical evaluation for Lasik treatment on both eyes.

Dr Tay saw him after pre-Lasik tests were done and said he was suitable, scheduling the surgery a week later.

But it emerged he was not a suitable candidate for Lasik treatment because he was suffering from degeneration of the cornea structure and the procedure involved risks, and he claimed he was not informed of this.

After the operation, he suffered blurred vision in his left eye and told Dr Tay about it in his follow-up visits to the clinic. In April last year, Dr Tay informed him that the worsening blurred vision in the left eye could have resulted from the Lasik procedure.

He was referred to corneal specialist Leonard Ang who three days later told him that 'no responsible and competent surgeon' would have prescribed Lasik for him, according to court documents filed.

There was also no way to predict when the vision in Mr Ang's right eye might deteriorate, said Dr Ang.

Mr Ang sued for negligence and breach of contract.

It is understood lawyers for the three defendants did not file their defence statements as they expected to settle the matter through mediation, something which the plaintiff never agreed to.

The damages payable will be assessed by a court registrar at a date to be fixed.

vijayan@sph.com.sg

Source: Straits Times © Singapore Press Holdings Ltd.

UNQUOTE

[Nick]

Singapore Medical Group (HK) Limited to establish its 1st flagship Eye Surgery Centre in Beijing, China

MoU Highlights:

• SMG, through its wholly owned subsidiary in Hong Kong, Singapore Medical Group (HK) Limited has signed a non-binding Memorandum of Understanding (“MOU”) with Zhong Ji Shi Jia a subsidiary of the Jing Hong Group to form a joint venture (the “JV”) in China.
• Singapore Medical Group (HK) Limited will hold a 52% stake in the JV.
• The JV will be responsible for the establishment of its first flagship eye surgery centre in Beijing, China by 31st December 2011 and subsequently 19 eye surgery centres and 5 tertiary hospitals in 1st and 2nd tier cities of China.

http://info.sgx.com/webcoranncatth.nsf/V...A00423AF8/$file/SMG_BeijingDraftRelease.pdf?openelement [SGX Announcement]

Noticed that the JV partners are targeting to achieve NPAT of $26 million within 5 years of operation.

SG Medical closed at 14.5 cents.

(Not Vested)

[Nick]

SUBSCRIPTION AGREEMENT IN RESPECT OF 25,516,644 PREFERENCE SHARES IN THE CAPITAL OF THE COMPANY

http://info.sgx.com/webcoranncatth.nsf/V...4003E52D3/$file/SMG_SubscriptionAgmtinrespectof25516644preferenceshs.pdf?openelement [SGX Announcement]

Seems they have secured equity financing for the proposed expansion into China.

(Not Vested)

[pianist]

today closes at 0.133..something is brewing?

[pianist]

last close at .135. Something is brewing?

[cyclone]

Voluntary conditional cash offer 0.1143546 sgd per share, 4.0% premium over last transacted price on 8 oct 2013, 7.8% discount over vwap for last one month, 12% discount over vwap for last one year.

<not vested>

[Jacmar]

This counter has more than double this yr and it is hardly covered in this forum. I must admit it wasn't in my radar screen either.
They hv just made an acquisition with profit guarantee at PE of 13. In this industry that's insanely cheap. Am I missing something here.