Singapore Medical Group buys third pediatric clinic for $7.9m

It will hire four new specialists for the clinic next year.

Singapore Medical Group (SMG) bought its third paediatric clinic for $7.9m, which will be its first hospital-based clinic at Mount Alvernia Hospital.

According to Maybank Kim Eng, the clinic acquisition is part of SMG's geographic and segmental expansion.

The acquisition will bring a subspecialty focusing on neonatology expansion that targets newborns, especially the ill or premature.

SMG will hire four new specialists by Q1 next year, which include a paediatrician, a senior obstetrics & gynaecology (O&G) specialist, and two cardiologists.

Maybank Kim Eng analyst John Cheong said, "We raised FY18/19E EPS by 0/2% for earnings contribution from the acquisition, offset by operating costs from the recruitment of four new specialists. We see a minor dilution of 1.4%. Maintain BUY and TP of SGD0.78, based on 27x FY18E EPS (average of 2-year forward mean of small-cap healthcare peers in Singapore)."