Company Overview

Beverly JCG Ltd, formerly known as JCG Investment Holdings Ltd, acquired 51% of the Beverly Wilshire Medical Centre Group of Companies (BW Entities) in Nov 2019. The BW Entities is a well-known brand in Malaysia with multi award-winning integrated beauty and wellness medical centres, specialising in aesthetic medicine, plastic surgery, dental aesthetics, hair restoration and a range of healthy aging and wellness services. BW operates two Malaysia Ministry of Health licensed medical centres and six licensed clinics across Malaysia.

1. Describe Beverly JCG’s Main Business Segments and Revenue Drivers.

• Beverly JCG Operates in Two Main Business Segments:
  o The aesthetic medical and healthcare segment serves as the core focus of Beverly JCG. With two medical centres and six clinics located across Kuala Lumpur, Klang Valley, Johor Bahru and Ipoh in Malaysia, the Group offers a comprehensive range of both invasive and non-invasive treatments. Backed by a team of 24 professional doctors specialising in various fields, Beverly JCG provides cosmetic surgery procedures (e.g. facelifts, eyelid surgery (blepharoplasty) and breast augmentation) as well as aesthetic medical treatments (e.g. fat reduction, Botox injections and hair loss treatment).

  o The trading and distribution segment represents Beverly JCG's legacy business. This segment focuses on trading and distributing of steel raw materials, consumables, instruments, and semi-finished products to steel mills, iron and steel foundries, and aluminum smelters in the Asia-Pacific region. The Group also provides ancillary services to support clients'specific requirements.

• The primary revenue driver for Beverly JCG is the aesthetic medical and healthcare segment, which contributed 96% of the Group’s FY2022 revenue. In FY2022, the aesthetic medical and healthcare segment generated revenue of S$10.07 million, representing a 14% year-on-year increase. The trading and distribution segment generated revenue of S$0.44 million, a notable 154% year-on-year increase.

2. Elaborate on Beverly JCG’s recent financial performance. What factors drove higher revenue and margin expansion? 2

• The reopening of Malaysian borders in April 2022 played a significant role in driving revenue growth for the Group. The BW Entities historically derived a substantial portion of its total revenue (approximately 40%) from overseas clients. Since the reopening, there has been a notable 14.8% increase in revenue, primarily attributed to a surge in foreign clients seeking aesthetic treatments from Australia and New Zealand. Beverly JCG expects contributions from overseas segment to continue to grow as the travel industry resumes normalcy.

• Beverly JCG has experienced a progressive rise in its gross profit margin, increasing from 45% in FY2020 to 55% in FY2022. This can be attributed to increased sales and higher price points of aesthetic medical treatments. The compound annual growth rates (CAGR) for revenue and gross profit are 48.6% and 68.1% from FY2019 to FY2022 respectively.

• The newly incorporated entities under the Natasha Beverly brand have made a positive impact on Beverly JCG's financial performance. The entities collectively generated total revenue of S$1.3 million in FY2022, representing a significant 44% increase compared to the S$0.9 million generated in FY2021. As organic growth entities, these brands are expected to continue driving higher revenue growth for the Group in the next 12 months.

3. How Has the Group Evolved Since the Rebranding in 2019?

• Since its rebranding in 2019, the Group has undergone significant developments and strategic transformations. However, it is important to note that the Group's evolution encompasses the period since its listing in 2006. Initially known as Albedo Limited, the Group underwent a series of name changes, including China Medical (International) Group Limited in 2016, JCG Investments Ltd in 2018, and Beverly JCG Ltd in 2020. Throughout its years of operations, the Group has consistently recognised the aesthetic medical and healthcare business as a high-growth industry.

• The Group made a significant move in 2019 by acquiring a 51% stake in the reputable and popular aesthetic medical and healthcare provider, BW Entities. This acquisition aimed to leverage BW Entities’ positive cash flow from operations and industry expertise as an opportunity to turn the company around.

• It was during this period that Dato’ Ng Tian Sang, the Group Chief Executive Officer, stepped up to lead the company with the goal to enhance long-term shareholder value. With decades of business leadership, Dato' Ng spearheaded the efforts to align the Group's focus towards the aesthetic medical and healthcare industry.

4. How has the acquisition of the BW Entities impacted business operations and financial performance?

• The Group’s values and business aligned with those of BW Entities, presenting an opportunity to tap into the growth trajectory of brand.

• Within the first two months of acquisition, the BW Entities recorded a revenue of S$1.6 million for FY2019. Despite the challenges posed by COVID-19 from 2020 to 2022, BW Entities still drove significant revenue growth for the Group. It generated a revenue of S$5.4 million in FY2020, which grew to S$10.5 million in FY2022, representing a CAGR of 39.4%.

• Furthermore, the Group saw improvements in gross profit margins, which rose from 37% in FY2019 to 55% in FY2022. These positive performances were achieved during the peak of COVID-19 pandemic.

5. How has COVID-19 affected Beverly JCG’s business, and what measures were implemented to mitigate its effects?

• The COVID-19 pandemic has had a significant impact on Beverly JCG's business operations, primarily due to the decrease in overseas clients as a result of border lockdowns and restrictions in Malaysia.

• The Group took proactive measures to mitigate the effects of the pandemic. A thorough assessment of the Group’s liquidity position was conducted, and strategic measures were implemented. One of the key measures involved adjusting prices for products and services to adapt to the changing market conditions. Beverly JCG recognised the financial challenges faced by consumers during the pandemic and introduced affordable medical and aesthetic packages to cater to their evolving needs. This customer-centric approach aimed to provide more accessible options for consumers while sustaining the business.

• In addition, the Group remained committed to its strategic plan for growth through mergers and acquisitions (M&A), as well as organic expansion. Beverly JCG is focused on strengthening and expanding its position in the core healthcare business, ensuring continued growth and resilience despite the challenging circumstances.

6. What are some of Beverly JCG’s key considerations when expanding into a new market or business vertical?

• When expanding into a new market or business vertical, Beverly JCG focuses on key considerations such as leveraging the expertise of professional doctors with established records and strong customer base. This strategic approach helps to enhance the company's brand presence and attracts a diverse range of patients.

• Beverly JCG also conducts thorough market research to gain insights into local dynamics and consumer preferences, allowing for tailored offerings. By understanding the unique characteristics and demands of each market or vertical, Beverly JCG can effectively position itself and capitalise on emerging opportunities.

7. Are There Any New Markets That the Firm Is Looking to Expand Into and Why?

• Beverly JCG is actively exploring opportunities to expand into Singapore’s dentistry market through potential acquisition of new dentists and mergers. The focus is on partnering with established dentistry chains that have demonstrated profitability and are able to generate healthy cash flow from operations.

• By pursuing these mergers, Beverly JCG aims to leverage the strengths and synergies of these established aesthetic medical and healthcare chains to enhance its business offerings. This strategic expansion will complement its existing operations and strengthen its position in Malaysia, while expanding into the Singapore market. It will also enable Beverly JCG to tap into new customer segments, broaden products and services portfolio, and further establish itself as a leading player in the aesthetic medical and healthcare industry.

8. What is the Group’s M&A strategy and what are some considerations when acquiring new subsidiaries?

• The Group’s M&A strategy revolves around expanding its suite of services through mergers with other large chain brands, with a particular focus on the cosmetic dental industry. In addition, Beverly JCG aims to enhance its regional presence in Singapore by merging with existing brands. These mergers are likely to involve share swaps and share issuance between the companies involved, reducing the need for significant cash considerations.

• Furthermore, the Group has been engaging in discussions with various players in the aesthetic medical and healthcare industry to establish synergistic partnerships or mergers. When considering potential acquisitions, the Group places importance on the reputation of the target company in terms of branding and the expertise of its attending doctors. Additionally, the target company should have a track record of generating positive cash flow from its operations.

9. Describe ESG factors that are material to Beverly JCG and how will that create long-term value for your stakeholders?

• Two key material ESG factors for the company are "Anti-Corruption" and "Diversity and Fair Employment“. 
  o Anti-corruption: Beverly JCG actively promotes ethical business conduct and strictly prohibits bribery or corruption in any form. The Group has implemented comprehensive policies and procedures, including a whistleblowing system. By maintaining a zero-tolerance approach towards corruption, Beverly JCG safeguards its integrity, protects stakeholder interests, and reduces legal and reputational risks. This contributes to the long-term value of stakeholders by fostering a culture of trust, transparency, and responsible business practices. 
  o Diversity and fair employment: The Group recognises the importance of diverse perspectives and believes in providing equal opportunities for all employees. It actively promotes fair treatment, equal opportunities, and non-discrimination within its workforce. Beverly JCG also aims to maintain a diverse board composition and believes it to be a means to enhance overall performance and decision-making process. By valuing and fostering diversity, the company creates an inclusive work environment that attracts and retains top talent, encourages innovation, and better serves the needs of its diverse customer base.

10.Why Should Investors Take a Closer Look at Beverly JCG?

• Despite the challenges brought about by the COVID-19 pandemic, Beverly JCG has successfully recovered to its pre-pandemic levels. The BW Entities has also swiftly shifted into recovery mode and overcame challenges associated with declined revenue from foreign clients.

• Having regained stability in 2022, Beverly JCG has set in motion its long-term strategic plans to provide sustainable value to its stakeholders in the aesthetic medical and healthcare business. The Group focuses on both organic and inorganic growth, aiming to expand its range of products and services and enter the Singapore market.

• Under the leadership of experienced business veteran Dato’ Ng Tian Sang as the Group Chief Executive Officer, Beverly JCG is executing a series of corporate actionsto enhance its performance. These initiatives include implementing cost management strategies, debt restructuring, as well as M&A activities. By expanding its products and services offerings and entering new markets like Singapore, the Group aims to accelerate growth and strengthen its market position.

10 in 10 – 10 Questions in 10 Minutes With SGX-listed Companies

Designed to be a short read, 10 in 10 provides insights into SGX-listed companies through a series of 10 Q&As with management. Through these Q&As, management will discuss current business objectives, key revenue drivers as well as the industry landscape. Expect to find wide-ranging topics that go beyond usual company financials.

This report contains factual commentary from the company’s management and is based on publicly announced information from the company.

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