HC Surgical Specialists

[Iosias]

Sharing my view,  i have little to nil knowledge in this medical industry.

I dont really like such companies in general. If the margins are too large, and we know doctors have large ego, they will ask for pay rise, if they dont get it, they will look for greener pastures or be their own boss. Not sure if HC surgical has such a strong brand that patient come for the brand or come for the doctors. I believe it is usually the doctors.

Shareholders will usually get little out of holding such companies. I feel that there is more financial engineering going on, example this dental one listed in singapore. And then there's  another medical one when a few bosses came in to fight over it about 2 years ago, ohohoh, i think that company is the worst, but of course if it has some solid real estate to back it up, then that's a different story. Its daily operations produce cash for doctors not for shareholders, terrible indeed!

The one that i think is of better quality is Raffles medical. It has grown good profit over the decade but we can see that in the past few years, not much solid growth, yet the market is valuing it at 15 to 20% growth.

(1) "If the margins are too large, and we know doctors have large ego, they will ask for pay rise, if they dont get it, they will look for greener pastures or be their own boss."
HC Surgical is helping doctors who want to startup their own clinics by imparting knowledge on admin and management while reducing their risk by partnering them capital wise. This is part of their journey of "becoming their own boss", holding 49% of their clinic's shares and also holding the group shares.

(2) Shareholders will usually get little out of holding such companies. I feel that there is more financial engineering going on, example this dental one listed in singapore.
Think you are mentioning about Q&M dental? For the first 5-6 years since their IPO, they produced over 400% returns for investors. That was until they have consolidated quite a bit of the SG market and seem to be running into cashflow problems. Q&M's FCF margins also seems lower.

Roll-ups or 'growth through acquisitions' are not uncommon and are seen all around us . 
- InvoCare Limited ASX:IVC - Oceania and SG's largest funeral services which acquired SG casket company & simplicity casket
- Facebook: Buying over whatsapp, instagram etc..
- Coca-Cola: Bought over so many brands ppl's lost count.
- Berkshire: Another large conglomerate owning multiple brands via acquisitions.

Partnering a high potential candidate to start up their own clinic by owning 51:49 while allowing them to exit and cash out down the road would be more of an incentive for the doctors to work harder and benifit both themselves and the group.


(3) there's  another medical one when a few bosses came in to fight over it about 2 years ago
Not too sure about this one. Let me know if you remember the name. Would be interesting to read up on it.


(4) The one that i think is of better quality is Raffles medical. It has grown good profit over the decade but we can see that in the past few years, not much solid growth, yet the market is valuing it at 15 to 20% growth.
I think RMG has a solid business model but hit a speed bump with its China expansions since Jan 2017. Over 11 yrs since IPO, it returned over 800% for investors. Market is prob hoping it overcomes the various issues.

I feel HC Surgical has that growth runway for at least the next 3-5 years. Can't say what issues might occur in the future though.