Alliance Healthcare Group Limited IPO​

ALLIANCE HEALTHCARE GROUP LIMITED is offering 32,000,000 shares for its IPO on Catalistat at $0.20 per share. The Group is offering 1mil shares to public and 31 mil shares as placement.

Market capitalization based on the offer price S$41.6 mil. 

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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.

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(S$’000)	Audited FY2016	Audited FY2017	Audited FY2018
Revenue	25,845.6	29,438.7	33,816.6
Profit before tax	899.5	1,865.5	3,417.9
Profit after tax	829.9	1,742.2	3,476.7

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.

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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.