Singapore Medical Group

Singapore Medical Group: CIMB has an unrated report on the counter. The house notes that the market is understandably excited over SMG's new management; Mr Tony Tan and Dr Beng Teck Liang both have outstanding track records. The aggressive streamlining of the company has also resulted in encouraging 2H13 numbers. However, the stock's 67% run-up within six months from Nov 2013 may just be too fast and too furious. Believe Singapore Medical Group (SMG) could be worth $0.17 per share, based on a 21x FY15 P/E (30% discount to peers' 30x P/E). The house assume its revenue growth can match Singapore healthcare industry’s CAGR of 8% from 2013 to 2017, and that it can earn a 6.6% net profit margin for FY15. Key re-rating catalysts include strong earnings growth and expansion of its services.