Sunday, January 17, 2010

Thomson Medical Centre - Buy by DMG (12 Jan 10)

With a target price of S$0.78, DMG maintained its buy call on Thomson Medical Centre.

It cited the following reasons

Thomson Medical’s 1QFY10 results were within our expectations. Earnings jumped 23.9% YoY to S$3.5m on the back of a 14.6% YoY increase in revenue to S$18.8m, due to increased baby deliveries and higher utilisation of its specialist services. Its growing Thomson Women’s Cancer Centre (TWCC), which started operations in Feb 09 also contributed to the improved revenue. Going forward, its Singapore operations are expected to continue doing well, with the addition of another O&G specialist tenant in 3QFY10 and opening of new Thomson Women’s Clinics (TWC) in its network. Its Vietnam ventures are progressing well. Its hospital in Binh Duong is set to start operations in 3QFY10 and Thomson Medical has completed the business plans for another hospital project in Hanoi. Maintain BUY and target price of S$0.78.

In addition, Thomson Medical Centre will be establishing the Thomson Pediatric Centre to expand its services. Patient admissions and baby deliveries are also expected to improve.

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