Wednesday, February 21, 2024

TalkMed Group FY2023 Earning Result

TalkMed Group Limited ("TalkMed") reported their FY2023 earning result yesterday [here].  Here is a quick dive into the numbers:

Numbers in S$ million unless stated otherwise.
Twelve Months Ending 31 Dec 2023 31 Dec 2022 % Change
Revenue 83.79 76.60 9.4
Profit before tax 37.82 36.85 2.6
Net Profit 29.35 28.99 1.2
EPS (in cents) 2.43 2.31 5.2
DPS (in cents) 2.20 3.00 (26.7)

FY2023 revenue was S$83.79M (FY22: S$76.60M), +9.4% y/y, attributed to an increase in patient numbers for the oncology business.  TalkMed 60%-owned subsidiary CellVec, however, saw a decrease of S$0.48M for its cellular and gene therapy related products and services.  Employee benefits expense form the bulk of the cost, FY2023 was S$33.78M (FY22: S$29.44M), +14.8% y/y, attributed to increase in staff bonus and staff salaries from increased headcount in the Group's operations in Singapore.  TalkMed recorded an impairment loss of S$0.33M for the loan made to its joint venture, Sino-Singapore Hospital Management (Chongqing), which fully wrote down the loan amount.  TalkMed also recorded impairment losses of S$0.99M on CellVec's plant and equipment, and S$0.65M in marking down the carrying amount of its investment securities held for sale to zero.

As at 31 Dec 2023, TalkMed holds cash & cash equivalents of S$89.9M.  Management highlighted competition in the region brought about by a strong Singapore dollar relative to currencies in the region and investments to build up healthcare infrastructure and expertise in the region.  The company aims to pursue growth in foreign patients.  A final dividend of 1.3 cents per share was declared, going Ex Date on 30 Apr 2024.

My Thoughts
I was a tad disappointed when the Board declared a final dividend of only 1.3 cents compared to 1.5 cents a year before.  TalkMed has a healthy cash position of S$89.90M, with total liabilities of around S$4M.  I question why the company needs to retain so much cash, and have written to TalkMed's Investor Relations for an answer.  Hope to hear back.  Nonetheless, TalkMed and the other healthcare stock in my portfolio, HC Surgical Specialists, enjoy very high ROE figures of above 30%.  At TalkMed's current price of $0.365, the dividend yield is around 6.0% - comparable to most S-Reits.  I will continue to accumulate shares in this company.

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