SAC Capital has initiated coverage on International Specialist Eye Centre : 40T 0% (ISEC) Healthcare with a “buy” call and a target price of S$0.44, as the research house is positive on the group’s continued growth.
The target price represents an upside of about 15 per cent from ISEC’s current share price levels. It implies a price-to-earnings ratio of 15.5 times, which the research house noted to be close to the stock’s historical average.
“In the medium term, we are upbeat about the prospects of ISEC’s continued expansion, particularly in Malaysia,” said SAC analysts on Thursday (Jun 6).
The analysts are also optimistic on the tourism and medical tourism industries’ prospects going forward, noting that Asean countries such as Thailand, Malaysia and Singapore are “increasingly popular destinations for medical tourism” including ophthalmology services.
This – along with rising affluence across such countries – collectively contribute to a growing demand for specialised ophthalmology services provided by companies such as ISEC, they noted.
In view of the group’s upcoming acquisition of a medical centre in Kuala Lumpur, they also said ISEC is well-positioned for sustainable growth given their efforts to “enlarge their highly-specialised talent pool”.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
SAC also highlighted the group’s strong results for FY2023 – especially with its revenue and net profit figures setting a new record since its initial public offering in 2014.
The research house is expecting ISEC to pay out a dividend of S$0.0173 per share in FY2024, based on the group’s trend of a more-than 70 per cent payout ratio since 2020.
This would translate to a dividend yield of 4.54 per cent in the current financial year.
Shares of ISEC were trading flat at S$0.38 as at 11.14 am on Thursday.
