Alliance Healthcare Group Limited IPO​

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ALLIANCE HEALTHCARE GROUP LIMITED is offering 175,888,352 shares for its IPO on Catalistat $0.20 per share. Market capitalization based on the offer price S$35 mil. (Figure to be final after final offer document is lodge)

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Business Overview

The group provide managed healthcare solutions to corporations and insurance companies by establishing an extensive network of medical services providers to deliver healthcare services to the employees of corporations or, as the case may be, insured members or policyholders
of insurance companies.

Alliance Healthcare Network, comprises:

  • 16 GP clinics under the “My Family Clinic” name, one GP clinic
    under the “Lee Clinic Pte. Ltd.” name and five specialist clinics
    which we own and operate in Singapore;
  • our panel of over 1,000 medical services providers in Singapore
    and Johor Bahru in Malaysia; and
  • our tie-ups with various GRHs;

Financial Highlight

The group revenue increase around 14% YoY and pharmaceutical services business segment contribute approximately S$2.2 million out of S$4.4 mil increase from FY17 to FY18.

(S$’000)Audited
FY2016
Audited
FY2017
Audited
FY2018
Revenue25,845.629,438.733,816.6
Profit before tax899.51,865.53,417.9
Profit after tax829.91,742.23,476.7

What I like

GP clinics are in demend and with Managed healthcare solutions, more companies and insurance will work with the group.

Wholesale pharmaceutical license issued by the Health Science Authority (HSA), which allows it to undertake the wholesale distribution of pharmaceutical products to hospitals, pharmacies and clinics in Singapore.

What I don’t like

Over heavily depending on panel treatment where payment might not come in due to closure or dispute.

Subject to healthcare laws and regulations including licensing requirements which are subject to fines or loss of license.

Conclusion

With the aging population, GP services will be in demand and wholesales of pharmaceutical products is profiting. P/E at 11x and NAV at 6.03 cents. Dividend yield at 2.5%. This stock is worth a punt at $0.20 a shares. CIMB is doing book building and will close on 21st May. Contact your RM if your interested for placement.

 

Author: The Financial Guy

1 thought on “Alliance Healthcare Group Limited IPO​

  1. The is the weakest TPA in the market. It is about to lose business with 3 insurance . So soon its TPA/Managedcare business is non existence. It is about to lose business from AXA, AIA and Aviva from insider sources. These information are not revealed in its propectus

    Its business is very vulnerable. The GP market is facing serious competitions from the government polyclinics and MOH is taking away its private patients and parking them under CHAS and Pioneer Generation. Rental is also escalating.

    MOH is also investigating GP clinics for CHAS frauds like Access Groups

    Drug distribution business for Alliance is very small and the margin is pathetic. Drug companies like Zuellig which is a major distributor itself does not support sub-distribution of drugs. Zuellig barely makes 3-5% in distribution. How much can Alliance make from drug distribution.

    The revenue is not real revenue. It is capturing passing through transactions with its panel clinics as revenue. Is tantamount to saying the revenue of an agent is $10mil when he sold a bungalow for $10mil . Revenue should be the admin fee or commission made per transaction. Same mistake made like the failed fullerton healthcare IPO which did not take place in the end.

    Better chance in making money from casinos

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