KGI Securities’ Amirah Yusoff has kept her “neutral” call on medical chain Singapore O&G. However, due to the lack of near-term growth catalysts, she has a new target price of 25 cents.

On July 3, she initiated coverage on the stock with a target price of 32 cents.

During the ten-week-long circuit breaker period, SOG’s clinics were operating at 20-30% capacity, roughly in line with the patient load that’s just 20-25% of the usual. Many consultations were deferred.

With the lifting of the lockdown, the “worst is over” for healthcare providers, says Amirah in her Aug 11 note.

However, she warns that with the economy in a recession, patients’ willingness to spend on non-essential procedures, especially in skin care, may be affected.

“Medical tourism may also take a longer period of time to recover as our neighbouring countries continue to fight the pandemic. These factors pose an added risk of further impairments to the goodwill relating to the segment,” she warns.

Her target price of 25 cents is based on a “conservative” valuation of 16 times earnings.

As at 2.20pm, SOG shares traded at 24 cents, down half a cent.