Numbers in S$ million unless stated otherwise.
| Six Months Ending | 30 Nov 2023 | 30 Nov 2022 | % Change |
|---|---|---|---|
| Revenue | 9.62 | 10.12 | (4.9) |
| Gross Profit | 7.99 | 8.73 | (8.5) |
| Net Profit | 3.45 | 2.05 | 68.3 |
| EPS (in cents) | 2.29 | 1.38 | 65.9 |
| DPS (in cents) | 0.70 | 1.00 | (30.0) |
1H2024 gross profit declined by 8.50% compared to 1H2023 mainly due to increase in cost of inventories, consumables and surgery expenses. Two new orthopaedic centres, Total Orthopaedics Pte. Ltd. and HC Orthopaedics & Surgical Centre Pte. Ltd. have received their medical licenses from MOH in October and November 2023 respectively. Management is confident that these two orthopaedic centres, which are located in Novena Medical Centre and Tampines heartland area, will grow steadily due to their synergy with the Group’s network of endoscopy centres.
My Thoughts
I hope HCSS management has gotten over the saga with Julien Ong and continued to focus on growing the business. I like HCSS because they have been able to maintain a very high ROE of 46% over the last five years. HCSS also has admirable gross margin and net margin of 37% and 32% respectively. With total liabilities of $13.3M and retained earnings of $15.2M, they are in a net cash position. The only problem is the low liquidity, which is typical of our local small caps.
Earning season is coming up. Will share the results of those companies in my portfolio. Watch this space!
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