ISEC Healthcare’s Novena centre fails to hit profit targets

It might take another 6 months for it to break even.

ISEC Healthcare is not in the best of health at the moment, and would need a few more boosts to recover.

According to a report by Maybank Kim Eng, MYR currency weakness has taken a toll on contributions from ISEC Malaysia. This is compounded by the delay in profits from ISEC’s new Novena centre in Singapore.

On the brighter side, ISEC is making progress in M&A negotiations. Last Friday, it announced a non-binding MOU to acquire 51% of Cao Thang (CT) Eye Hospital in Ho Chi Minh City. Based on our preliminary estimates, CT could add 5% to ISEC’s FY16 net profit
and 3.5% to EPS. This is in line with the 10% acquisition premium analysts have assumed for deriving ISEC’s TP.