Stock Idea After a record quarter, this healthcare stock | FSMOne SG - Research Highlights

Stock Idea

After a record quarter, this healthcare stock still offers an upside potential of close to 40%

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• The share price of Singapore Medical Group fell after discussions with a third party regarding a possible share transaction fell through.

• Nonetheless, the company continued to deliver a great financial performance, chalking up a record quarter due to strong demand from its Diagnostics & Aesthetics segment.

• The long-term growth story of the private specialist healthcare sector remains intact. Structural trends such as rising income level, an ageing population, and the advancement in technology will drive the growth of SMG.

• With a net cash position of SGD 8.2 million, SMG is poised to deliver inorganic growth in the long term. We believe that target acquisition markets are likely to be in the Southeast Asian region.

• We have upgraded our target price to SGD 0.43, derived from a fair PE multiple of 14X applied to our estimated FY2023 earnings per share. This represents an upside potential of a decent 37%.

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: Singapore Medical Group (SGX:5OT)