The MOBE will outline the collaboration where both parties shall be working closely, including engaging relevant stakeholders and understanding regulations and specific market requirements. It will also identify potential opportunities where UEM Edgenta can demonstrate and offer its solutions and capabilities with a view of establishing a commercial structure should the opportunity arise before the end of December 2021.”
We explore Edgenta’s foray into digital healthcare, which begins with the launch of QuickMed (a digital healthcare platform aimed at digitalising healthcare practices in Malaysia). While we have yet to factor in any financial impact from the digital health ventures for the time being, we raise our FY21/22 earnings forecasts by 52.7/65.5% (amid a low base) to account for earnings recovery in Edgenta’s core businesses. After tweaking our SOP-derived valuation methodology and rolling over our valuation year, our TP rises to RM2.53 from RM2.00. Maintain BUY.
Edgenta’s core business currently involves facilities management for the healthcare and infrastructure sectors, which historically accounted for ~45% and ~35% of revenue over the previous 5 years. With Edgenta’s success in adopting technology in their healthcare support services operations, digital healthcare is the logical next step. In this report, we explore Edgenta’s planned digital healthcare ventures going forward.
QuickMed. QuickMed is a platform launched by Edgenta to help healthcare providers digitise their operations and connect to the internet (i.e. their target user base are healthcare providers). QuickMed’s digital solutions include storage of data on cloud, automation of billing, and more. We reckon Edgenta will need to acquire a sizeable user base before these ventures can be monetised effectively.
Potential longer-term business model. We believe QuickMed will be the start of a comprehensive digital healthcare journey. While it is still unclear what monetisation strategies Edgenta will purse, it may come in a few forms, namely: (i) subscription fees from healthcare providers using the QuickMed platform for operations, (ii) selling medical products to users online, (iii) charging fees for value adding services within the platform such as virtual consultations, (iv) charging referrals fees to clinics that patients find via Edgenta’s platforms, (v) selling membership packages to users, (vi) selling wellness packages to users.
Ideal management team. We are enthusiastic about Edgenta’s appointment of Mr. Syahrunizam Samsudin (Managing Director & CEO) in mid-FY20 given his formidable track record in launching and growing digital ventures. Note that during his time at Touch ‘N Go, Mr. Samsudin successfully launched TNG e-wallet as a JV with Ant Financial (affiliate company of Alibaba) which grew to become the largest e wallet in Malaysia.
Forecasts. As Edgenta’s digital healthcare ventures are still in its infancy, we do not factor in any financial impact from the digital health ventures for the time being. However, we raise our FY21/22 earnings forecasts by 52.7/65.5% (amid a low base) to account for earnings recovery from the Infrastructure services division from road maintenance works pushed back into FY21 from Covid-19 disruptions on operations in FY20.
Maintain BUY. We take this opportunity to roll over our valuation year and tweak our SOP valuation methodology (Figure #6). All in all, our TP rises to RM2.53 from RM2.00. In the shorter term, we reckon the share price will be driven by (i) recovery in the infrastructure services earnings from roadworks pushed back from FY20 (ii) projected FY21 healthy dividend yield of 4.8%.
Source: Hong Leong Investment Bank Research - 10 May 2021
MALAYSIA Airports Holdings Bhd (MAHB) stands to benefit handsomely from the provision of Covid-19 screening and testing at its international airports, sources familiar with the matter tell The Edge.
It is understood that the tender document in which MAHB is seeking to award the screening and testing at its airports contains a requirement that about 25% of the top line from the services should go to MAHB.
One of the shortlisted bidders tells The Edge, “Yes, it (the 25% quantum requirement for MAHB) is in there (the tender document).”
On whether he considers the quantum to be high, he declines to comment, saying, “It’s like rental.”
When asked about the 25% quantum, the airport operator in an emailed response says, “In keeping with our corporate governance for any tender proceedings, the commercial terms are confidential between the bidder and MAHB.”
It is understood that MAHB is looking at testing as many as 10,000 passengers at KLIA and an additional 10,000 passengers at klia2, for a start. Once operations at these airports are running smoothly, the other airports will follow suit.
In 2019, KLIA had 29.2 million passengers while klia2 had 33.1 million. This works out to passenger traffic of 80,000 a day for KLIA and close to 91,000 a day for klia2. With the delay in reopening borders, travel restrictions, travel bubble arrangements and reciprocal green lane travel, MAHB is understood to be looking at testing as many as 20,000 passengers on a daily basis — 10,000 each in KLIA and klia2 — with the other international airports following later.
The Edge understands that the charges for the testing and screening per passenger can be between US$130 and US$150 (about RM535 to RM618) and will be borne by the passenger. This works out to between RM5.35 million and RM6.18 million a day for 10,000 passengers as per MAHB’s guidance in the tender documents.
This would mean annual revenue of between RM1.95 billion and RM2.26 billion for the screening and testing provider, and between RM488.19 million and RM563.92 million for MAHB, from one airport, considering 25% of revenue goes to the airport operator.
For its financial year ended December 2020, MAHB suffered a net loss of RM1.12 billion from RM1.87 billion in revenue. For FY2019, it chalked up a net profit of RM537.04 million on the back of RM5.21 billion in sales.
According to MAHB, the 64.2% drop in revenue is “in tandem with the contraction in passenger movements of 69.5% due to the unprecedented outbreak of Covid-19 which has resulted in large capacity cuts, travelling bans and border closures across the globe”.
It attributes the loss to the significant decrease in revenue and an impairment of RM500.4 million from its Istanbul Sabiha Gokcen International Airport in Turkey’s concession rights, brought about by a significant contraction in passengers as a result of the pandemic.
For FY2020, MAHB recorded 43 million passenger movements, a contraction of 69.5% over the previous year, while aircraft movements decreased 58.1%, resulting in the bleeding.
“Hence this (payment from the Covid-19 screening and testing provider) will help them (MAHB) recoup some of what they have lost,” an official at one of the companies interested in the screening and testing contract says.
He adds that the 25% quantum is among the reasons many companies opted out of the tender.
“Over and above the 25% or 26%, we have to use many other facilities from MAHB, which further decreases margins … so it’s not a walk in the park; it may be difficult (to make ends meet),” he says.
The Edge understands that 31 companies had taken the tender documents, with 17 expressing interest, and 10 having been shortlisted by MAHB.
Another deterrent, the official says, is the short time frame for constructing the facilities. It is not clear if MAHB is looking at one player doing the screening and testing at all the international airports, or if the contracts will be broken down according to airports, with different operators managing and operating the services at different airports. However, among the criteria for the award is that the winning bidder has to build testing lounges at the airports.
“From what I understand, MAHB wants to start everything in a rushed manner, so it may not be conducive for some of the players,” he opines. According to him, the award and commencement of operations are slated to be in May, but MAHB has not made any announcements on this.
So far, The Edge has identified five of the 10 companies shortlisted by MAHB. They are MyEG Services Bhd (MyEG) in partnership with BP Clinical Lab Sdn Bhd; Bestinet Sdn Bhd in a joint venture with Tass Tech Sdn Bhd; Maju Healthcare Sdn Bhd with Gribbles Pathology (M) Sdn Bhd; UEM Edgenta Bhd in a standalone bid, and another involving MNC Global Sdn Bhd.
Most market watchers say UEM Edgenta could rope in Pantai Holdings Sdn Bhd, which has laboratory facilities, to strengthen its bid. Pantai Holdings, which operates the Pantai Hospital
@lofan73 this counter ahs no potential to go up. better sell,change to others. 08/06/2021 1:15 PM -------------------------------------------------------------------------------- Fundamentally this counter is not bad, can invest BUT got one problem only:-
Everytime price move up a bit , govt (i.e. MOF subs - UJSB) is selling ,Why they sell this counter, coz govt needs money to buy vaccines, give financial aids packages to business and rakyat affected covid 19 pandemic, stimulus packages here and there..where you think they are going to get money
So have to sell down this counter la, to raise cash. They are not going to sell other counters deemed loosing money ( cut loss is a no no for them, it will look bad when kena scrutinised in parliament), so this counter they sell since it will appear as profitable trade in their book
Its a reasonably good company, enjoy the dividend first lo, hopefully this year got, since last year takde, and hold as long long term investment lo.
if we think not suit your investment strategy, maybe you looking for 6 to 12 months price shoot up 50%, i think better look at other counters..coz MOF hold so many shares inherited from TH, by the time they clear, God knows how long it will take
Wall Street Tumbles at Open as Growth Fears Mount; Dow Down 470 Pts Stock Markets By Geoffrey Smith Investing.com -- U.S. stock markets tumbled in early trade on Thursday as technical factors in the bond market...
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Posted by warchest > 2021-04-25 23:15 | Report Abuse
Is gonna break its immediate support of 1.87 and than above 2 soon. Stay tune!