I am deciding between IHH and HMI but decided to write on what i already owned.
While I am a firm believer that you should build out your annual 6 digits dividends from Reits/Trusts/Divvy firms (these include Parkway R, First R and my recent addition of RHT), HMI could have legs to run for another 3 years and might be a good bet.

HMI Holdings Limited, was listed on 15 October 1999 on SGX Sesdeq (now known as SGX Catalist) before upgrading to the SGX Mainboard on 10 March 2008.
The principal activities of key subsidiaries are as follows:
i) Healthcare The Group operates 2 tertiary care hospitals in Malaysia; the Mahkota Medical Centre in Malacca and the Regency Specialist Hospital in Johor, as well as 19 patient representative offices located in Indonesia, Malaysia, Cambodia and Singapore.
It also provides hospital management, project consultancy and advisory services in the region.
ii) Education The Group operates HMI Institute of Health Sciences in Singapore, which provides nursing education and healthcare vocational training.
The Institute also provides training and placement of foreign educated nurses for Singapore hospitals. Looking forward, HMI is committed to its vision of improving lives through healthcare and education.

1) Growing Revenue
HMI's revenue is expected to increase by 14 per cent this year, with an 11 per cent rise next year and 10 per cent in 2019.

2) Strong Outlook and Pipe
*) Mahkota Medical Centre : Launched nuclear medicine service with a new Positron Emission Tomography (“PET-CT”) scanner, making it the first and only hospital in Malacca to offer this service
*) Regency Specialist Hospital (“RSH”): New hospital extension block expected to commence construction in second half of 2017, pending necessary approvals
*) The Group expects to build on successes and growth over past years and continue to expand

3) Strong Financial Position (3Q17)
Maintained strong balance sheet with cash position of MYR 120.9mn and net debt of MYR 89.9mn

4) Highest Upside compare with peers (direct copy from KE report)
Our DCF-based TP of SGD0.84 (WACC 7.4%, LTG 2.0%) implies 35x FY18E
P/E, on par with the peer group average. This does not include future
expansion in Mahkota and potential M&A. HMI’s current 26x FY18E P/E is
a 19% discount to peers, despite having a comparable 3-year EPS CAGR of

5) It is cheaper to operate in Malaysia
The medical tourism industry in Malaysia is expected to achieve its target revenue of MYR1.3b or 30% YoY growth in 2017, according to the MHTC.
On average, medical travellers' contributions to the economy were double that of the regular tourists; a foreign patient would spend about RM1,000 per visit, excluding other expenditures while staying in the country.
Malaysia Airlines has signed an agreement with MHTC for joint marketing to position Malaysia as an international medical tourism destination.
In 2016, more than 860,000 medical travellers sought treatment in Malaysia.
The number is expected to grow as more private hospitals are able to cater to foreign patients

6) Nam See Investment has been buying over the years

7) EPS is set to explode from 0.008 to 0.67 in year 2019
In Mar 2017, HMI fully acquired the minority stakes in its two hospitals, up from 49% stake in Mahkota and 61% stake in Regency.
We expect this to lift FY18E EPS by 39%, assuming full-year contribution in FY18.
The acquisition cost MYR557m (MYR211m will be paid in cash and the rest in the form of shares and rights issue at SGD0.57 per share).
The P/E multiple for the acquisition is 19x FY16 core earnings or MYR2.2m per bed (MYR557m / 254 beds), this is below HMI’s current market cap per bed of MYR2.9m. The deal should be highly EPS accretive and has completed in Mar 2017.
Beyond the low-hanging fruit, HMI is exploring several M&A opportunities in Malaysia and other Southeast Asia countries. Outside Malaysia, HMI has operational experience in Singapore and Indonesia. It has built a strong base and good brand name in Malaysia.
This has placed it on the radar of other healthcare players. HMI has been in talks with a few profitable medical centres in different states in Malaysia. It targets to enhance its network and feed patients into its hospitals via smaller medical centres.

8) HMI fares better than KPJ and IHH in terms of average inpatient bill size, EBITDA margin and ROE

* My Take: Holding period of 3 years, buy on weakness.

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UOB Kayhian: Our top pick is Malaysia-based hospital operator HMI, which is gaining grounds in terms of quality and service offerings, but still at a fraction of the bill
sizes in Singapore. While we remain positive on the long-term growth strategy of RMG and IHH, we believe mid- to near-term growth outlook will be hampered by
elevated expansion cost (19 June 2017)


Great analysis. I have been a fan of this for years, and continue being so, cos of the growth potential and the alignment of the management interests with ours.


Reply to @ilovedollars : Ya, more like consolidation after the recent jump. This stock does that.

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