Singapore Medical Group's M&A deals to boost earnings by $1m

It could reflect a 72% growth in earnings per share.

According to Maybank, Singapore Medical Group is expected to record a 3-yr EPS CAGR of 72% for FY16-19E. In addition, the FY17E EPS growth of 225% will be driven largely by the newly acquired Astra Women’s Specialist Group in Feb 2017 as well as the proposed acquisition of two pediatric clinics announced in Apr 2017. Astra should contribute c.50% of FY17E EPS.

In the future, SMG also aims to add at least $1m in earnings through mergers and acquisitions each year, and it targets to double the no. of specialists in its Women’s Health segment to 16 over the next 3 years. 

Here’s more from Maybank:

For the health screening segment in particular, SMG is also considering adding more equipment to their capital.

SMG’s multi-disciplinary platform is a good proxy to the highly profitable and fragmented medical specialist segment, where the largest player only commands c.8% market share. Its platform differentiates it from other listed healthcare players due to its focus on a wider range of specialties.