Standard Chartered starts Healthway Medical (5NG.SG) at Inline with $0.20 target price, based on discounted cashflow valuation, implying 36x 2010 P/E, according to Dow Jones.

Stanchart says healthcare group’s aggressive expansion, via opening chain of clinics in China, setting up specialist center in Singapore, has significant long-term potential, but notes company faces challenges in execution.

“The group has not delivered good execution in its specialist services in the past and has limited experience of organic expansion,” says research house.

Adds mass exodus of prominent specialist doctors from Healthway’s employment also troublesome, while cost pressure mounting due to aggressive expansion.

Shares +2.9% at $0.175.