HMI gaining a steady pulse in the medical tourism sector

SINGAPORE (Sept 15): KGI Fraser is initiating coverage on private healthcare operator Health Management International (HMI) with a “buy” call at a target price of 60 cents.

Aside from a healthcare training institute based in Singapore, HMI owns and operates two tertiary hospitals in Malaysia with a 61% and 49% respective stake in Regency Specialist Hospital (RSH) in Johor and Mahkota Medical Centre (MMC) in Malacca.

In a Wednesday report, analyst Joel Ng says he expects RSH to be the group’s main growth driver over the next 2-3 years after doubling its existing bed capacity by FY19, due to its proximity to Johor’s industrial and residential areas, as well as the group’s plans to grow its medical tourism segment. He also believes the hospital’s 19.8% EBITDA margin, compared to MMC’s 27.5%, means group EBITDA margins have upside to increase.

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