Zhitong Financial APP learned that China Merchants (Hong Kong) released a research report that maintained Sima Ophthalmology's (03309) "neutral" rating and was optimistic about its strategy of epitaxial M & A growth and transformation into a multi-specialist health care provider. The valuation model shows that the current share price valuation is reasonable, with a target price of HK $4.80. The bank introduced its financial forecast for fiscal year 2022x23 with expected revenue of HK $1.657 billion / 1.984 billion (up 49 per cent from a year earlier) and adjusted net profit of HK $93 million / HK $139 million (up 327 per cent from a year earlier).
According to the report, the company has accelerated the pace of epitaxial mergers and acquisitions in 21 years and 22 years, and has completed 10 mergers and acquisitions in a number of specialist service areas. The bank believes that this confirms that the company is in a strong position in the growing number of mergers and acquisitions in the medical services industry, mainly from smaller health care institutions that have been hard hit by the epidemic. The bank believes that the company will continue its active extension M & A strategy in 22 years, mainly based on 1) smaller institutions are still negatively affected by epidemic prevention measures in the first half of 22, 2) the company's platform is able to empower smaller institutions, and achieve synergies (for example, introducing patient flow and improving operational efficiency) and 3) a cash-rich and robust balance sheet (HK $274 million at the end of fiscal 22).
In the field of ophthalmology, the company acquired the Guest Ophthalmology Center in January 2022, the bank said. The acquisition strengthens the company's presence in the ophthalmology field in Hong Kong. The acquisition increases the company's team of Hong Kong ophthalmologists to about 30, of which seven are from the original guest ophthalmologist. The company also cut into the oral service track through the acquisition of Aikang Jian Dental Group in Shenzhen and three dental clinics in Hong Kong. At the same time, the company also enters other specialties such as medical beauty, family doctor, oncology and so on. The company expects to achieve synergies and cost savings by strengthening its medical service platform.
Risk Tips:Expansion is less than expected, COVID-19 epidemic, supervision, health insurance risks.