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This healthcare stock could be a multibagger as share price plunges to all-time low

Stanislaus Jude Chan
Stanislaus Jude Chan • 3 min read
This healthcare stock could be a multibagger as share price plunges to all-time low
Phillip Securities Research forecasts that the company will clock another year of positive EBITDA in FY2020.
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SINGAPORE (Mar 10): Phillip Securities Research is reiterating its confidence in healthcare player Clearbridge Health, on the back of the expansion of its regional footprint.

The optimism comes despite Clearbridge posting a set of results for FY2019 ended December that came in below expectations.

Clearbridge narrowed its losses to $10.6 million for FY2019, a 42.8% improvement from losses of $18.4 million a year ago.

While the group remains loss-making, Phillip notes that Clearbridge turned EBITDA positive in 2HFY2019.

Excluding one-offs, share option expenses and R&D expenses, Clearbridge recorded EBITDA of $0.38 million in 3QFY2019. EBITDA then grew 44.8% quarter-on-quarter to hit $0.55 million in 4QFY2019.

And Phillip forecasts that the company will clock another year of positive EBITDA in FY2020.

The brokerage is keeping its “buy” call on Clearbridge Health with an unchanged target price of 26 cents.

FY2019 revenue more than trebled to $21.5 million, from $6.1 million a year ago.

The top-line growth was driven by strong contributions from its healthcare acquisitions during the year.

“The early years of Clearbridge Health will be spent building its regional footprint,” says Phillip’s research team in a March 10 report. “We believe Clearbridge Health is focused on organic growth of its acquisitions through investing into newer facilities, larger economies of scale in operations, cross-sell and introduce more complex services across their regional platform.”

Already, Clearbridge has expanded its regional presence to include Singapore, Indonesia, Philippines, Malaysia and Hong Kong.

In particular, PT Indo Genesis Medika (IGM), which was acquired in May 2019, contributed some $10.3 million, or 48% of total group revenue for FY2019.

Meanwhile, Clearbridge Medical Philippines, a 4-storey facility in Manila, is also seeing improving patient flow following the completion of its renovation in 1HFY2019.

In Singapore, the group is also expected to benefit from the acquisition of nine clinics under the Dental Focus Group in September 2019.

“In emerging markets, general practitioner (GP) clinics will be less profitable due to the practice of self-medication. However, dentistry cannot be self-medicated,” Phillip’s analysts say.

“We expect another year of strong growth for CBH. The largest contribution will come from recent acquisitions – IGM and Dental Focus. Newly opened facilities in Malaysia and the Philippines will be another source,” the research team adds.

As at 12.50pm, shares in Clearbridge Health are trading 0.4 cent higher, or up 3.4%, at 12 cents.

This comes after the counter plunged 14.7% to close at an all-time low of 11.6 cents on March 9 – the “Black Monday” which saw global markets plummet by record levels on the back of a Saudi-led oil price war as well as coronavirus fears.

Shares in Clearbridge are currently trading 57.1% lower than its initial public offering (IPO) price of 28 cents in December 2017, and 79.6% below its all-time peak of 58.8 cents in January 2018.

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