SGX Market Updates

Highlights of Best-Yielding Constituents of SGX Healthcare Index


PUBLISHED ON |

16 November 2017

  • The SGX All Healthcare Index is a free-float, market capitalisation-weighted index that measures the performance of the listed healthcare sector in Singapore. In the 2017 year-to-date, the Index has registered a price gain of +7.9%.

  • The best-yielding constituents of the Index – differentiated by REIT and non-REIT components – are: RHT Health Trust (+6.7%), First Real Estate Investment Trust (+6.2%), Parkway Life Real Estate Investment Trust (+4.7%), Singapore O&G (+4.4%), ISEC Healthcare (+4.0%) and HC Surgical Specialists (+3.6%).

  • Among these six highest-yielding REIT and non-REIT constituents of the Index – RHT Health Trust, First REIT, Parkway Life REIT, ISEC Healthcare and HC Surgical Specialists – own and/or operate healthcare facilities and assets, including clinics and hospitals, located outside Singapore.




The SGX All Healthcare Index is a free-float, market capitalisation-weighted index that measures the performance of the listed healthcare sector in Singapore. Currently, the five largest components by index weight are Top Glove (11.9%), Haw Par Corp (10.1%), Raffles Medical Group (10.0%), Parkway Life REIT (9.9%) and First REIT (9.9%). These five stocks make up more than half the index.



SGX All Healthcare Index (by Company Count)




Source: Bloomberg, (data as of 15 November 2017)
Companies are classified by their MSCI Global Industry Classification Standard (GICS®) Sub-Industries.



In the 2017 year-to-date, the SGX All Healthcare Index has registered a price gain of +7.9%, compared with the MSCI AC Asia Health Care Index’s +9.1% gain in Singapore dollar terms. Between January and October 2017, institutional investors have been net-sellers of Singapore healthcare stocks in nine of the 10 months, as funds rotated out of defensive stocks into cyclical plays.

The best-yielding constituents of the Index – differentiated by REIT and non-REIT components – are: RHT Health Trust (+6.7%), First Real Estate Investment Trust (+6.2%), Parkway Life Real Estate Investment Trust (+4.7%), Singapore O&G (+4.4%), ISEC Healthcare (+4.0%) and HC Surgical Specialists (+3.6%).



The table below details the highest-yielding constituents of the SGX All Healthcare Index, differentiated by REIT and non-REIT constituents. Click on the stock name to view its profile in SGX StockFacts.

Name SGX
Code
Weight
%
Market
Cap
S$m
Last
Price*
Price
Change
YTD %
Price
Change
1Yr %
Ind
Dvd Yld
%
GICS Sub Ind
REIT Constituents
Parkway Life REIT C2PU 10.0 1,694 2.800 18.6 15.2 4.7 HealthCare REITs
First REIT AW9U 9.9 1,068 1.370 8.3 8.7 6.2 HealthCare REITs
RHT Health Trust RF1U 8.2 723 0.895 -2.2 5.3 6.7 HealthCare Facilities
Non-REIT Constituents
HC Surgical Specialists 1B1 0.6 104 0.695 13.0 8.6 3.6 HealthCare Services
ISEC Healthcare 40T 1.1 165 0.320 8.5 4.9 4.0 HealthCare Facilities
Singapore O&G 1D8 1.1 236 0.495 -15.7 -14.3 4.4 HealthCare Facilities

Source: Bloomberg & SGX StockFacts (data as of 15 November 2017).
* Last price of companies are denoted in their respective trading currencies. Except for Last Price, SGD equivalents are shown in table.



Many Singapore-listed healthcare providers are leveraging on the industry’s favourable demand trends – such as Asia’s rapidly ageing population, increase in lifestyle diseases, rising disposable incomes and higher per capita healthcare spending – and are expanding into regional as well as global markets to meet growing patient needs.

There are multiple opportunities and challenges in the ongoing supply and demand for healthcare services across Asia's healthcare industry in the longer term.

On the demand side, Asia’s population is growing, as is longevity. Rising affluence and ageing demographics will be key structural drivers. Notably, industry reports have highlighted the share of population aged over 65 years in Asia is set to quadruple by 2050, which will inevitably lead to increased demand for healthcare services.

On the supply side, the number of doctors, nurses, hospitals and medical equipment diverge across the region, and still trail the per capita averages of the 34 OECD member countries. With many of the Asian emerging economies grappling with limited fiscal funding, there is an increasing role for corporations to engage in these opportunities and challenges.

Investors have the opportunity to participate in the structural Asian healthcare theme through SGX-listed stocks.

Among the six highest-yielding REIT and non-REIT constituents of the SGX All Healthcare Index, RHT Health Trust, First REIT, Parkway Life REIT, ISEC Healthcare and HC Surgical Specialists – own and/or operate healthcare facilities and assets, including clinics and hospitals, located outside Singapore.



Best-Yielding non-REIT Index Constituents


Singapore O&G

Background: SOG is a leading group of 11 specialist medical practitioners dedicated to the health and wellness of women and children, with a long, established track record in Obstetrics and Gynaecology in Singapore. Its spectrum of services range from pre-pregnancy counselling, delivery, post-delivery care to gynaecological problems, skin problems and complex cancer conditions.

Latest Quarterly Results: For the third quarter ended 30 September 2017, SOG reported a 3.3% decline in net profit to S$2.3 million, while revenue rose 2.4% to S$7.7 million.

Company Outlook: SOG said it is not aware of any major change in trends or competitive conditions that would significantly affect its operations and businesses. In July, the Group extended its services through the offering of maiden general paediatrics and adolescent medicine services, which allows its specialists to continue taking care of existing patients and their newborns. As this new segment is in a start-up phase, contributions are expected to be moderate for FY2017. Barring unforeseen circumstances, the Group expects to remain profitable in the next reporting period and 12 months.

To read the kopi-C profile of SOG CEO Dr Victor Ng, click here.



ISEC Healthcare

Background: ISEC is a comprehensive medical eye care service provider, with 21 specialist doctors and four general practitioners. It has ambulatory surgical centres in Malaysia (Kuala Lumpur, Penang, Malacca and Sibu) and provides specialist medical ophthalmology services to Lee Hung Ming Eye Centre in Singapore’s Gleneagles Hospital. It specialises in the fields of cataract and refractive surgery (including LASIK), vitreoretinal diseases, corneal and external eye diseases, glaucoma, facial cosmetics and aesthetics surgery, adult strabismus and paediatric ophthalmology.

Latest Quarterly Results: For the third quarter ended 30 September 2017, ISEC reported a net profit of S$2.2 million, up 31% year-on-year, while revenue jumped 31% to S$9.7 million.

Company Outlook: ISEC expects the healthcare industry to remain challenging for the next 12 months due to overall dampening of the economic climate in Singapore and the region. While the growth of medical tourism in Malaysia is expected to be closely correlated to the weakening of the Malaysian Ringgit, which in turn results in the stronger purchasing power of foreign currencies, revenues from its Malaysian operations, which are translated to Singapore Dollars, will be impacted by these foreign exchange movements. With the commitment to offer its patients the best possible treatment, ISEC will continue to enhance its talent pool and stay at the forefront of the ophthalmology services industry by driving innovation and adopting cutting-edge technology.

To read the kopi-C profile of ISEC Executive Vice Chairman Dr Lee Hung Ming, click here.



HC Surgical Specialists

Background: HC Surgical Specialists is a medical services group primarily engaged in the provision of endoscopic procedures, including gastroscopies and colonoscopies, and general surgery services with a focus on colorectal procedures across a network of 12 clinics located throughout Singapore. It is also building up its regional experience – the Group has entered into a Memorandum of Understanding with an independent party to provide consultancy and training services at the Transport Hospital in Hanoi, Vietnam, where our specialist surgeons will be registered to practice.

Latest Quarterly Results: For the year ended 31 May 2017, HCSS reported net profit including total comprehensive income of S$1.26 million, down 54.3% year-over-year, while revenue jumped 19.8% to S$9.5 million.

Company Outlook: The Group completed several acquisitions and joint ventures during the financial year to boost its capabilities and increase the number of experienced specialist doctors in its stable. In organic growth terms, it recently opened three new endoscopy centres to expand its reach into the heartlands of Singapore. While the slow momentum of domestic and regional economies may continue to have a dampening effect on the overall healthcare industry, HC Surgical expects to continue growing and remain profitable in financial year 2018.

To read the kopi-C profile of HCSS CEO Dr Heah Sieu Min, click here.







This article is provided by SGX My Gateway.



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