Before this, it was a darling because of the below:
Very consistent, isn't it?
Now, with earnings stagnating, it show the share price hit a 52-week low recently.
An almost 1/3 fall from its peak.
If u read around, there are many reports that state how its business might worsen. Let me summarize (Parrot):
1) Holland V Medical is fully leased but there is no spike in revenue, that means the patient load is worse than expected.
2) China expansion will worsen earning for the next 3 years. Management guided that hospital will turn around after 3 years.
3) My simple and quick Google of cancer doctors, review or doctors show names thrown out mainly from parkway and mount Alvernia. But beside these 2 quarters, their revenue is still on a good uptrend, so I will give them the benefit of doubt that the tactic to go medical services aka clinic is a good one.
So, now it is not just a "non-grower" but also a falling knife.
The reason for buying is more qualitative than quantitive. I remember referring the international SOS for reference to hospital to visit if there is emergency, when bring pupils for overseas trip in Nanjing. I believe many people relied on international SOS for reference for medical treatment because China local hospitals are really quite different from those u find in Singapore outside Shanghai.
Next, I saw the rapid expansion of medical services aka clinic network across Singapore. These will serve as fillers to send reference to hospital. Why is this still not happening in the 2 quarters no.? I am not sure, but many of these clinics are new. Lot 1 clinic has its crowd.
I also like the fact that past year expansions did
Not strain the balance sheet.
I am not sure if this price is cheap, honestly. I however, is willing to accept lower earnings (but not zero profits) as they expand, and accumulate as the price go lower. Singapore market must stay strong.
The money used to buy Raffles came from some liquidation of Silverlake axis. So my cash holding is still 60%. Silverlake is still my biggest holding.