Good Doctors, Mediocre Management

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Singapore O&G was established in 2011 and listed in Catalist board of SGX in June 2015. The company mainly provide healthcare services for woman, children and their family.

Specialist services provided are:
1. Obstetrics & Gynaecology

2. Cancer treatment

3. Dermatology

4. Paediatrics

At the moment, Singapore is the only served market. 

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Growth Strategy

SOG generally expand her business by signing service agreements with medical practitioners. This includes basic salary and a percentage of earning above pre-determined target. 

From 2015, the firm began a series of diversification; first in cancer-related then Dermatology and finally paediatrics. 

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Segments & Revenue

Both Cancer-related and Paediatrics are growth areas for SOG. While O&G rate of growth appear to be maturing. Dermatology business had been declining due to lower healthcare tourist. 

Overall revenue grew at a CAGR of 24% since 2015. 

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Financial

Gross margin in 2014 was 51.8% and had been trending lower to 30.4% in 2019. This was due to Dermatology margin weakening from 35% in 2016 to 12% in 2019. Meanwhile Cancer-related and Paediatrics margins continue to improves. 

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Net profits grew steadily, reaching a high of $9.2M in 2018. SOG recorded a loss of $1.1M in 2019 due to impairment of $11.9M for her Dermatology acquisitions.

Net margin was highest in 2015 at 32.5% and trending lower the past four years. 

As of Dec-2019, the company still have a Goodwill of $12.23M in her balance sheet. 

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Management

CEO Dr. Ivan Lau who was appointed in May-2018 resigned in Nov-2019. He is replaced recently by Mr. Choo Kok Wei, a CFO in the healthcare industry and a former auditor with KPMG. 

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Opinion

Although healthcare is a good business with respectable margin; running it as a public company requires a balance of medical professionalism and business acumens. SOG past performance had been mediocre, evidenced by poor acquisitions and governance. Nevertheless, operationally the company does exhibit the ability to grow new businesses. 

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Note: On Feb-2020, ex-director Christopher Chong was charged with cheating relating to the acquisition of a business & medical practice of dermatologist Dr. Joyce Lim.