Healthscope Ltd

HSO Details

Completed sale of medical centers:Healthscope Ltd (ASX: HSO) stock surged over 5.6% on October 03, 2017 while the group successfully sold their medical centers to Fullerton Health, to focus on their core business of hospitals and international pathology operations.On the other hand, the shares of HSO lost over 21.8% in the last three months (as of October 02, 2017) due to underperformance with regards to their profit result.

FY17 Performance (Source: Company reports)
 
However, the group’s hospital expansion projects generated a solid revenue growth of 8.4% for fiscal year of 2017 as compared to same period last year, which is better than their rest of the portfolio and the broader Australian private hospital market. Their New Zealand Pathology division also delivered a solid business which extended their market opportunity in commercial, veterinary and analytical businesses. HSO is organizing its annual general meeting on October 19, 2017. The group now expects annual double-digit EPS growth from FY19 after taking into account the challenges to Hospitals division for FY18 and EPS growth rate hurdles of 5% threshold against the performance rights grant. Meanwhile, speculation about a possible spin-off or divestments of assets is being signaled by the market. Trading at a good dividend yield, we view the recent fall in the stock as an investment opportunity. We give a “Buy” recommendation on the stock at the current price of $ 1.78


HSO Daily Chart (Source: Thomson Reuters) 

Ramsay Health Care Ltd

RHC Details

Core Australian business, the powerhouse for the group:Ramsay Health Care Ltd (ASX: RHC) stock corrected over 14.7% in the last three months (as of October 02, 2017) impacted by their softer France business. Ramsay Générale de Santé hospitals performance still showed resilience while tough tariff environments for the near term existed; and reported for a revenue rise of 0.3% and EBITDAR increase of 0.5% to €448.3 million. But overall the group delivered a statutory net profit rise of 8.6% year on year (yoy) to $488.9 million driven by admissions and procedural volumes in Ramsay’s Australian business. Australian business revenue surged 7.0% while EBIT enhanced 13.6% boosted by solid demand and brownfield developments. Their international businesses also performed well despite tough tariff environments. UK business operating profit (EBITDAR) rose 1.7% to £113.9 million. We give a “Hold” on the stock at the current price of $ 62.30


RHC Daily Chart (Source: Thomson Reuters)

Mayne Pharma Group Ltd

MYX Details

Two products added to Australian portfolio: Mayne Pharma Group Ltd (ASX: MYX) recently reported that they have received Therapeutic Goods Administration (TGA) approval for Monurol® (fosfomycin) granules used for treating urinary tract infections (UTIs). They also launched Urorec® (silodosin) capsules for the relief of lower urinary tract symptoms associated with benign prostatic hyperplasia (BPH). Both the products got five years of data exclusivity as new chemical entities (NCEs) in Australia. This is a major milestone for the group whose shares have been under pressure, and fell over 52.7% in the last six months (as of October 02, 2017). MYX has otherwise reported a strong FY17 performance (profit up 137% over FY16); however, allegations related to price-fixing and competitive pricing pressure in U.S. generic drugs market keep on weighing on the stock. Given the prevailing challenges, we maintain an “Expensive” recommendation on the stock at the current price of $ 0.66


MYX Daily Chart (Source: Thomson Reuters)

Sonic Healthcare Ltd

SHL Details

New contract bagged by UK joint venture: Sonic Healthcare Ltd.’s (ASX: SHL) stock edged a little lower while the group reported that their UK joint venture, Health Services Laboratories (HSL, 50% owned by SHL’s subsidiary, The Doctors Laboratory or TDL), got an exclusive twelve-year contract to offer pathology/clinical laboratory services to Barnet Hospital and Chase Farm Hospital in London. This would offer excess of £12 million of revenue per annum to HSL. The onsite laboratory at Barnet Hospital would be completely remodeled and will get new equipment and platforms to support the acute services requirement, and non-urgent and specialist testing which would be centralized into TDL/HSL’s new hub laboratory in central London. On the other hand, the stock is still trading at a higher price to earnings ratio and we maintain an “Expensive” recommendation on the stock at the current price of $ 21.01


SHL Daily Chart (Source: Thomson Reuters) 

Fisher & Paykel Healthcare Corp Ltd

FPH Details

Suspension of two patent proceedings brought upon by ResMed: Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) has recently revealed about suspension of two patent proceedings at a German Court, brought by ResMed (ASX: RMD) regarding selling of face and nasal masks by the group. The cases have been suspended pending the final outcome of oppositions filed by Fisher & Paykel Healthcare with the European Patent Office. Further, concerns on patentability of the asserted claims of RMD’s patents have been raised. Meanwhile, FPH had launched five new innovative products last year while finished buying 15-hectare site in Mexico. They started earthworks for fourth building on their NZ site. FPH’s new application consumables contributed 55% of their second half of 2017 while their Optiflow nasal high flow therapy for infants’ use reported a lower treatment failure rate with Oxygen therapy. The group’s positive milestones led to an outstanding stock rise of about 40% this year to date (as of October 02, 2017). However, the stock is trading at very high levels and looks “Expensive” at the current price of $ 11.64


FPH Daily Chart (Source: Thomson Reuters)

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