Re: {LONGTERMINVESTORS} Fortis Healthcare - Thread
RAJESH DESAI
Religare Health Trust is a business trust of Fortis and has the mandate to "invest principally in medical and healthcare assets and services in Asia, Australasia and emerging markets," the company said in a filing to the BSE.
For the IPO, Religare Health Trust will be selling 567,455,000 shares at a price range of SGD 0.88 (the minimum price) and SGD 0.97 (the maximum price), its preliminary prospectus filed with Monetary Authority of Singapore showed.
The prospectus further said that IPO proceeds are expected to be between SGD 499.4 million and SGD 550.4 million, which is based on minimum and maximum offer price.
It, however, did not disclose the listing date of the offer.
"Religare Health Trust's (RHT) initial portfolio comprises 11 RHT clinical establishments, four greenfield clinical establishments and two operating hospitals located across India," the prospectus said.
Citigroup, Nomura, Religare Capital Markets, Standard Chartered, CIMB and DBS are managing the offer.
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CA. Rajesh Desai
RAJESH DESAI
Fortis Healthcare, country’s largest hospital chain, has raised a little over S$510 million or Rs 2,300 crore, by offloading 70% stake in its business trust Religare Health Trust through an initial public offer on the Singapore Stock Exchange. As per its prospectus filed with the Monetary Authority of Singapore, the Religare Health Trust will initially hold hospital properties worth $612.4 million in its portfolio. Religare offered 567.46 million shares at $0.90 each.
The company will utilize these funds to pare its current debt of around Rs 7,000 crore. Further, Religare Health Trust has assured a dividend distribution yield of around 8.5% for its investor.
Fortis had initially planned to list Religare at Singapore bourses in the fourth quarter of last year, but deferred the listing due to volatile stock market conditions and on account of delays in consolidation of businesses.
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CA. Rajesh Desai
Rajesh Desai
29 November 2012
SingaporeCompany Note - Initiation
Religare Healthcare Trust [ PDF ]
Indian healthcare exposure
RHT SP / RELI.SI | OUTPERFORM - N/A | Share Price S$0.82 - Tgt. S$0.95
REIT | - by Siew Ling TAN
Sponsored by Fortis Healthcare, the second largest hospital chain by revenue in India, RHT will be the first SGX-listed trust to offer unique exposure to the growing Indian healthcare market. We see long-term growth underpinned by capacity expansion and ARPOB increases. We initiate coverage with Outperform and DDM-based target price of S$0.95 (discount rate: 12.4%). Forward yields of 9.7-10.0% (for ordinary unit-holders) are among the highest within the Singapore market and are attractive against listed peers. We expect catalysts from earnings delivery and execution.
*Please do not reply to this message, as it was sent from an unattended mailbox.
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CA. Rajesh Desai
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CA. Rajesh Desai
Rajesh Desai
Fortis Healthcare has reported results for third quarter ended December 31, 2012.
The company has reported 84.11% fall in its net profit at Rs 3.60 crore for the quarter as compared to Rs 22.65 crore for the same quarter in the previous year. Total income from operation of the company has increased by 30.48% at Rs 89.22 crore for quarter under review as compared to Rs 68.38 crore for the quarter ended December 31, 2011.
The company, on consolidated basis, posted growth of over 26 fold in its net profit at Rs 705.03 crore for the quarter as compared to Rs 27.02 crore for the same quarter in the previous year. Total income from operation of the company increased by 153.97% at Rs 1,538.60 crore for quarter under review as compared to Rs 605.82 crore for the quarter ended December 31, 2011.
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With regards,Kashyap Tanna.--
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CA. Rajesh Desai
Rajesh Desai
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CA. Rajesh Desai
Rajesh Desai
Fortis Healthcare - De-leveraging to play out; Hold
Weak quarter. Fortis’ 4QFY13 revenue grew 25.9% yoy to `16.1bn, more than our expected `15.2bn, led by higher growth in its international business. The reported EBITDA margin declined 550bps yoy to 7% (vs our estimated 9.2%) due to the commencement of costs pertaining to the business (Religare Health) trust and the commercialization of ~300 beds at the Gurgaon facility. The lower EBITDA margin coupled with higher interest cost resulted in the reported `1.16bn net loss (vs our estimated `16m net loss).
Revenue growth strong. The higher-than-expected revenue growth was led by a 30% yoy increase in revenue from international operations and an 18.4% growth in domestic operations. The domestic hospitals division reported 16.3% yoy growth in revenue (vs our estimated 18%) and the SRL business rose a strong 27% yoy. With a 39.3% yoy increase in revenue, Dental Corp Australia was the key growth driver in the international business, followed by Hoan My Vietnam with 34.9% revenue growth.
Our take. We believe the weak margin performance was chiefly due to the business trust costs and the commercialization of the Gurgaon facility. We believe that margins would gradually improve to 8.5% by FY15 (from 7% now) on the maturity of the hospital beds. To address its key concern, de-leveraging its balance sheet, the company has taken various measures such as dilution of its stake in the Religare Health Trust, sale of the Dental Corp subsidiary, institutional placement programme, etc. Considering the less-than-expected margins in 4QFY13 which would only gradually expand, we lower our FY14e and FY15e EBITDA respectively 8.2% and 8.1%. However, we raise revenue estimates 1.4% and 1.3%.
The stock trades at 17.5x FY14e and 14.1x FY15e EV/EBITDA. We maintain a Hold on it, with a revised target of `105 (earlier `118) based on 14x Sep’14 EBITDA and `15 a share for the stake in RHT. Risks.High gestation period and delay in commercialization of the new beds.
Thanks & Regards
Anand Rathi Institutional Research
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CA. Rajesh Desai
Rajesh Desai
Fortis: Debt reduction may impact revenue growth
Latest data from Bloomberg shows that the stock now has eight buy, four hold and one sell recommendation from just one buy, seven hold and six sell recommendations in September last year. So, what has prompted the analysts to change tack?
Fortis diffused its focus and ventured into regions such as Australia, New Zealand and Canada through the inorganic route. These acquisitions squeezed the company's finances, raising its interest cost and adversely impacting its bottom line.
The stock was considered riskier than its India-focussed peer - Apollo HospitalsBSE 2.60 %. Add to this, the company buying out its promoters' stake in Fortis International - the healthcare company with presence in the Asia-Pacific -in September 2011 also didn't go down well with investors. The stock is trading now at half its price two years ago.
In FY13, the company's interest cost was 10% of its consolidated revenues and a tad lower than its operating profit of Rs 650 crore, while its debt was over Rs 5,000 crore. Thedivestment of two of its foreign assets in Australia and Vietnam resulted in cash flow of Rs 2,000 crore and a fund raising of nearly Rs 320 crore through allotment of foreign convertible bonds will help pare debt.
Though analysts are now bullish on the stock, it may be a while before the initial rounds of de-leveraging pay off. While the sale of overseas assets will help cut its debt and reduce pressure on interest costs, it will also impact revenue growth
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CA. Rajesh Desai