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S$0.965 S$0.765
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First Real Estate Investment Trust (First REIT) invests in a diversified portfolio of income producing real estate used for healthcare and/or healthcarerelated purposes. The Companys assets are located in Singapore, Korea and Indonesia. Financial Highlights
(Y/E Dec) S$m Gross Revenue Net Prop Income Distr Earnings Distr Per Unit(S$) Distribution Yield FY09 30.2 36.0 21.0 0.076 9.1% FY10 30.3 60.5 21.3 0.066 7.9% FY11F 53.0 46.0 41.7 0.067 8.7%
Source: Bloomberg
52wks High-Low Number of Shares Market Capitalization Analyst: SIAS Research admin@siasresearch.com Tel: 6227 2107
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Ongoing efforts to increase awareness: Despite being a leader in hospital treatment, SHG is active in gaining exposure and establishing awareness in Indonesia through its marketing strategies. SHG is currently marketing checkup service to corporations and clinics so as to increase awareness and its customer base. For example, SHG is offering cheap PET/CT Scans and MRI scans to further bring awareness and as part of SHGs commitment to society. Building a technological moat: During this trip, we were very impressed with the services offered due to the number of sophisticated medical machines owned by SHG. For example, SHG is in charge of bringing state of the art machines such as the LINAC Varian with simulator for cancer treatment to their newly opened MRCCC.
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Source: SIAS Research
The image of the ground floor is reminiscent of our last trip to FREITs hospitals where its was packed full of people queuing and hanging around the cafes and shops. This can be said to be similar in concept to our local government hospitals such as SGH and NUH.
Facilities and Equipment: SHLV uniquely positions itself to offer specialised services such as MRI scans and neuro-treatment by having much more sophisticated treatment machines compared to other hospitals. For example, SHLV is one out of four hospitals in Indonesia that has the 3-tesla MRI machine in Indonesia. We note that SHLV aims to keep rates affordable for the middle income level as part of their commitment to the society.
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SHLV also offers VIP patient rooms and exclusive medical checkup rooms to appeal to the wealthier Indonesians and for medical tourism with developed country citizens looking for cheaper alternatives for medical treatment. Our Siloam guide for the site visit also stated that family members tend to accompany the patient and would check in to these rooms to enjoy the sofa beds. Moving forward, SHLV is bringing in gamma knife technology which is used to treat brain tumors using radiation therapy. The equipment for the project costs approximately US$5 million which sets SHLV up to compete in medical tourism scene regionally. SHLV also plans to expand the size of its premise, with the development cost handled by Lippo Karawaci, thereby adding about 30 to 40 A class beds. Room to expand if needed: Management also stated that there are opportunities for expansion or services through redeveloping a portion of Imperial Aryaduta Hotel & Country Club (IAHCC) or working together in promoting medical tourism.
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We were further introduced to various top-end equipment by our Siloam guides, underpinning the message on what it takes to achieve the Centre of Excellence status. Similar to SHLV, SHKJ also offers exclusive class wards at a very competitive rate. Siloam Suites, the best rooms that the hospital has to offer, has a guest room on top of a spacious patient room, flat-screen TVs and personalised services. Adjusting to the competition: We were told that there had been recent competition with the opening of two hospitals launched over the past three years: Puri Indah Hospital and Grha Kedoya Hospital. The Siloam guide mentioned that SHKJ has been around for twenty years and services offered by them were much more comprehensive than the other two. We were also told that with its competitve rates and established reputation, patients generally put SHKJ as one of their first choice in specialised treatment.
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Personalised Hospital Treatment: MRCCC also offers personalised services such as helicopter lifting patients to the hospital as opposed to the conventional motorcycle and van ambulance. This will bypass road jams which is common during peak hours in Jakarta. Page 7 of 13
Not Hitting Full Capacity Yet: MRCCC is still in its infant stage with less than three months since its official launch. SHG is focused on creating awareness through offering affordable check-ups, aliasing with corporations and clinics. Our SHG guides also stated that the opening of MRCCC by the Indonesias President has generated interest from many corporations with indirect feature in the media.
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Page 10 of 13 *http://www.thejakartapost.com/news/2011/04/05/poor-healthcare-indonesia-boosts-medical-tourism.html
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Figure 17: Financial Forecasts and Estimates SGD(S$ m) Gross Revenue Income After Tax Distributable Income DPU (S$) Total Current Assets Total Non-Current Assets Total Current Liabilities Total Non-Current Liabilities Total Equity Net Income Before Tax Cash from Operating Activities Cash from Investing Activities Cash from Financing Activities Net Change in Cash Net Cash - Beginning Balance Net Cash - Ending Balance ROE ROA Distribution yield Debt/Equity P/E P/B
Source: Company, SIAS Research
FY08 30.2 23.0 20.8 0.076 14.6 324.9 61.4 23.1 255.1 23.8 20.6 0.3 -22.1 -1.2 13.6 12.4 9.0% 6.8% 9.1% 0.33 4.8 0.9
FY09 30.2 36.0 21.0 0.076 13.7 340.9 10.2 73.4 271.0 38.7 22.7 -2.0 -25.6 -4.9 12.4 7.5 13.7% 10.4% 9.1% 0.31 6.2 0.9
FY10 30.3 60.5 21.3 0.066 41.8 612.8 81.3 94.2 479.1 80.0 27.6 -160.8 153.4 20.1 7.5 27.6 16.1% 12.0% 7.9% 0.37 4.5 1.1
FY11F 53.0 46.0 41.7 0.067 48.4 595.4 32.8 87.4 483.7 45.6 37.1 17.4 -35.9 18.6 27.6 46.2 9.6% 7.1% 8.7% 0.25 10.5 1.0
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Update Report
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