Investors are missing out on ISEC Healthcare, say analysts

It’s a cheap stock with significant upside potential.

Investors are missing out, according to a report by Maybank Kim Eng, as ISEC Healthcare has been sorely overlooked with its potential upsides despite being the cheapest healthcare stock.

The ophthalmology practice has wiped its slate clean for a 2016 rebound. Last year, it shut down its loss-making ISEC Novena that bled $2.6m in 2015, and the last of Novena’s costs is bound to the group’s 4Q15 results. Already, ISEC has booked $1.3m in 9M15. Further, full-year contributions from newly-acquired SSEC in Melaka.

Following the SSEC acquisition, the pace of mergers and acquisitions are also poised to ramp up. Up to five are currently in the works, which could potentially double profits if closed. In Malaysia, the group has signed three non-disclosure agreement with eye clinics in Seremban, JB and East Malaysia. In Singapore, ISEC is on the case of a chain of GP and aesthetics clinics in its first diversification move into complementary specialties. In Vietnam, it has a new MOU with Hai Yen group.

Moreover, a growth strategy that deals mainly in acquisitions in the healthcare space has already been proved to work, particularly by dental specialist Q&M.

Maybank Kim Eng further notes that unlike Q&M, though, ISEC does not have a stranglehold on its early shareholders. ISEC is allowing them a platform to practise without the bother of dealing with operations, and is offering them institutional protection before their skills are lost to age.