Sunday, April 29, 2007

In the Pink of Health

Recently, one of MOS' friends revealed that she was expecting her first bundle of joy in the latter half of the year. After a judicious selection process, the medical centre of choice for her gynecology care was Thomson Medical Centre (Public, SIN:5FV) ("TMC"). Followers of MOS will recall it was our top performer last year. TMC has continued on its soaring path to bridge the valuation gap between itself and other locally listed healthcare counters. Compared to the price of 29 cents when it appeared on MOS' radar screens in February 2006, TMC has since gained 129% (based on Friday's close of 66.5 cents)!

One of the reasons for the robust showing was the stellar report card which the obstetrics, gynecology and pediatric specialist turned in recently. For 1H results ending Feb 2007, its revenue and net profit grew by 8% and 35% respectively. In addition, TMC is expected to benefit from the local government's pro-creation policies. With a growing middle class in the country, the group is well poised to capture their fair share as the locals seek higher end medical care and facilities to take care of their first child.

Despite the above, TMC's moves suggest that their management acknowledges the saturating and competitive Singapore market dynamics. Hence, TMC has been making good inroads into overseas markets. The group's management contracts for three women and pediatric hospitals in Vietnam are expected to kick in over the next 2 to 3 years.

The progress of the above initiatives clearly indicates that MOS' top performer in 2006 remains very much in the pink of health.



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