How clear is Clearbridge Health post-listing outlook?

How clear is Clearbridge Health post-listing outlook?

By: 
PC Lee
14/12/17, 04:06 pm

SINGAPORE (Dec 14): Clearbridge Health (CBH), the healthcare firm which focuses on the delivery of precision medicine, boosts a capable team to lead its expansion across Asia, says Maybank KimEng.

See: Clearbridge Health to list on Catalist; seeking to raise $24.6 million

CBH is an early entrant in Asia metabolomics profiling, precision oncology testing and genetic-based screening tests. The company also provides a range of healthcare services, from primary preventive services to oncology diagnostic services.

Top management is helmed by CEO Jeremy Yee who has experience in other medical related business throughout Asia including stints as CEO of SGX-listed Cordlife Group and COO of ASX-listed Cordlife.

In conjunction with its listing, CBH is selling 88 million new shares at 28 cents each by way of placement. Of the $24.6 million raised, $11 million is earmarked for expansion of medical clinics and centres, $7.5 million for working capital and general corporate purposes and $3 million for expansion of lab testing services.

Markets eyed by CBH include the Philippines, Indonesia, Myanmar, India, Malaysia and China. CBH has already entered into a term sheet for the potential acquisitions of a medical centre in Philippines.

Based on its 481 million issued shares, CBH will have a market cap of $134.7 million immediately at listing. Major shareholders include Halcyon Investment Capital with a 24% stake, Johnson Chen with 15.7% stake, Maxim Vorobyev with 8.3% and Johnny Chen at 6.4%.

As for the risks, analyst John Cheong says CBH incurred a net loss of $2.1 million for FY16 ended Dec and $2.4 million for 1H17 with revenue coming in at $716,000 and $284,000 respectively. CBH also expects operating expenses to increase after listing.

CBH may also require extra funding to implement its long-term business strategies. It may not be able to raise finance in a favourable term. Also, shareholders might be diluted if CBH issues new shares or other securities, says Cheong.

Meanwhile, CBH operates in a highly regulated industry and its business is subject to extensive regulations, licensing and accreditation requirements. Compliance and violation might lead to additional costs and resources.

Skilled and qualified staff is required to operate and manage the laboratory and medical clinics/centres. CBH’s ability to attract, retain and motivate staff is also crucial.

CBH will start trading on Catalist on Dec 18.

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