SingMedical 1H21 (SGD 0.315 , 17 Aug 21)

1H21 Singapore Medical Group

This is the stock that I've invested in 2017 and stay in premium condo for 4 years now. Lots of thing happened and I still holding this stock. Let's look at their financial report 

INCOME STATEMENT

1H2020 definitely is not a good year for all companies. During that period, we are in lock down condition, unable to go out buy food and cannot even go company. Circuit breaker, government not allowed to go out. Time flies, with high vaccination rate and achieving herd community, government start to slowly open the border. All people stuck in Singapore and went to Aesthetic to do facial, company slowly gain back the momentum and profit for the period increased to 7.7mil from 3.4 mil. 

Balance Sheet

Intangible assets >30 percents of total assets. This is not a healthy balance sheet and this is the lesson learnt for me. This quarter, we can see that loan and borrowing is reduced, no doubt is a good thing. This company is a net cash company. 

Cash flow

Company able to generate positive cash flow even though at this tough time. Besides that, from the cash flow, we know that management team is working hard to pay off all the debt and also acquire PPE for growth. 

Segmentation

From the report, we can see that health contributed 61percents of the revenue. But Dignostic and Aesthetics is the area that have higher profit margin and the demand is increasing fast. This might be due to border close and causing internal spend. 

Geographical

From the report, we know that Indonesia and Australia are making profit. Whereas for Vietnam, the losses is increasing. Recently (Sep 21), SMG is increase stack on Vietnam. 

My thought

Actually this counter is not bad, just don't know what it never go up. Holding for 4 years and waste my time. Vietnam is growing and definitely healthcare will get benefit. This counter need so catalyst to boost the price up. Overall the financial report is not bad. 

Must take note of next quarter report, if vietnam turn losses into profit then we can consider to buy in. 

Let's calculate the ROE

Total equity: 158,565

Net profit : 7,727

ROE:4.8% 

EPS:1.49 

Rough estimation earning: 1.49 x 2 = 2.98 

Price / Estimate Earning = 10.2

Medical industry PE: 15-18

Ordinary shares : 482,788,906

NAV (excluding Intangible) = 36,648,000

Price / NAV = (0.3 x Ordinary shares) / 36,648,000 = 4.0

AEM 1H21 (SGD4.02, 16 AUG 21)

AEM 1H21

It's been awhile since I wrote previous article. Lazy bugs were biting me resulting I'm not able to write the article. Ok, stop nonsense. So, how is the result for AEM 1H21? Let's take a look. 

Financial Report

Looking at the picture with 4 red circle then we probably know what's the results. Revenue dropped 30% and Profit almost drop half compared to 1H20. If we read back to previous report, actually management team has informed us that 1H20 will not get much order and customer ramp their production in 2H20.

Balance Sheet

Intangible assets increased almost 50 percents, and 25 percents of total assets. Need to beware of this, if next quarter still increase then may need to consider to drop this stock. I have phobia on the intangible assets. Besides that, cash and cash equivalents drop almost 50 percents.

Financial Liabilities = Loan x 3 , important thing must say 3 times !!! Cash drop and loan increase significantly. High Alert and need to beware of this. Cash drop 64mil and loan 60mil !!!

Cash flow 

CFO is negative!!!! Increase in inventories and payable resulting CFO negative. 

If we look at CFFI, AEM has aggressively acquire PPE roughly 52mil. Need to be aware of the negative CFO. 

Forecast

As mentioned early, AEM management expect a strong uptake in 2H21. Let's wait for 2H21 results! 

My thought:

Company aggressively expand causing decrease in cash flow. For 1H21, definitely the financial report is not comparable to 1H20 and CFFO is negative. Need to take note of the 2H21, if the report is not good, we need to give up this stock as I would consider this as integrity issue (Strong uptick in 2H21). 

Not to forget their target this year is 460 ~ 520million