SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

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Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

Econ Healthcare (Asia) / Equity Bottom-Up

<p><em><strong>Non- SGX Report: These equity research reports are not written by the SGX</strong>.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</em></p>
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<h2>Econ Healthcare (Asia) Limited</h2>
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<h3>Share investment turns sour</h3>
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<h3>Investment Thesis:</h3>
<p><strong>Investmentofsurpluscashgoeswrong.</strong> Econrecently invested c.S$4.0m of its idle working capital into 11,800,000 units of shares of Crosstec Group Holdings Inc (3893 HK), an interior design solutions company listed on the Hong Kong Stock Exchange. On 11 Jan, Crosstec saw an 84% decline in its share price to HKD 0.38, which implies a potential investment loss of over S$3.2m for the company, equal to c.118% of FY22F net earnings.</p>
<p><strong>Reconsideration of investment mandate needed.</strong> While the company stated that the investment was intended to improve the yield on idle cash through dividends and share price appreciation, the investment of the majority of its idle cash into a single, loss-making, small-cap company is a riskier decision than one would expect. In our view, the company should re-consider its investment mandate and strategy.</p>
<p><strong>Wait for further clarity before focusing back on core business; downgrade to HOLD</strong>. We believe that the growth prospects for Econ’s core nursing home business remain intact but we prefer to wait for more clarity on the company’s plans for its investment strategy before turning positive. Our DCF-based TP is lowered to S$0.28 with a higher WACC of 11.8%, reflecting heightened uncertainty and risk in the company’s financials stemming from this development. Note that the investment of S$4m represents 10% of its forecast shareholder equity (Mar 22).</p>
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Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.




Econ Healthcare (Asia) Limited




Share investment turns sour




Investment Thesis:
Investmentofsurpluscashgoeswrong. Econrecently invested c.S$4.0m of its idle working capital into 11,800,000 units of shares of Crosstec Group Holdings Inc (3893 HK), an interior design solutions company listed on the Hong Kong Stock Exchange. On 11 Jan, Crosstec saw an 84% decline in its share price to HKD 0.38, which implies a potential investment loss of over S$3.2m for the company, equal to c.118% of FY22F net earnings.
Reconsideration of investment mandate needed. While the company stated that the investment was intended to improve the yield on idle cash through dividends and share price appreciation, the investment of the majority of its idle cash into a single, loss-making, small-cap company is a riskier decision than one would expect. In our view, the company should re-consider its investment mandate and strategy.
Wait for further clarity before focusing back on core business; downgrade to HOLD. We believe that the growth prospects for Econ’s core nursing home business remain intact but we prefer to wait for more clarity on the company’s plans for its investment strategy before turning positive. Our DCF-based TP is lowered to S$0.28 with a higher WACC of 11.8%, reflecting heightened uncertainty and risk in the company’s financials stemming from this development. Note that the investment of S$4m represents 10% of its forecast shareholder equity (Mar 22).













(Non-SGX Report) Econ Healthcare (Asia) Limited - Share Investment Turns Sour

<p><em><strong>Non- SGX Report: These equity research reports are not written by the SGX.</strong>&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</em></p>
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<h2>Econ Healthcare (Asia) Limited</h2>
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<h3>Long-Term Expansion Plans Intact</h3>
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<h3>Investment Thesis:</h3>
<p><strong>Maintain BUY</strong> with TP of S$0.40, which implies potential upside of 28%. We reduced our FY22F net profit forecasts by 39% (net profit pre-extraordinaries by -28%), on the back of impacted Malaysia operations and one-off costs in FY22F.</p>
<p><strong>Beneficiary of ageing population trends.</strong> The private nursing home industry is forecast to grow at a CAGR of 13.6% in Singapore, 11.5% in Malaysia, and 16.6% in China from 2020 to 2024F. Econ Healthcare (Asia) Limited (“Econ”) is the leading premium private nursing home operator in Singapore and Malaysia, with a presence in China, and is a clear beneficiary.</p>
<p><strong>Local champion to a regional brand.</strong> Growth in Singapore will be driven by commencement of the Build Own Lease (“BOL”) Henderson centre (236 beds) by FY23F and BOL Jurong centre (732 beds) by 2025 (FY26F). Growth in Malaysia and China will come from the ramp-up of nursing homes in Puchong, Malaysia (138 beds), Chongqing, China (44 beds), Changshou, China (280 beds) and lastly, Chengdu, China (400 beds) by FY23F.</p>
<p><strong>Firm earnings outlook, supported by government tender wins.</strong> We project Econ to achieve a net profit CAGR of 13% over FY21-FY24F and 15% over FY21-FY26F as contributions from the BOL centres in Henderson and Jurong kick in from FY23F and 2025 (FY26F) respectively.</p>
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Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.



Econ Healthcare (Asia) Limited



Long-Term Expansion Plans Intact



Investment Thesis:
Maintain BUY with TP of S$0.40, which implies potential upside of 28%. We reduced our FY22F net profit forecasts by 39% (net profit pre-extraordinaries by -28%), on the back of impacted Malaysia operations and one-off costs in FY22F.
Beneficiary of ageing population trends. The private nursing home industry is forecast to grow at a CAGR of 13.6% in Singapore, 11.5% in Malaysia, and 16.6% in China from 2020 to 2024F. Econ Healthcare (Asia) Limited (“Econ”) is the leading premium private nursing home operator in Singapore and Malaysia, with a presence in China, and is a clear beneficiary.
Local champion to a regional brand. Growth in Singapore will be driven by commencement of the Build Own Lease (“BOL”) Henderson centre (236 beds) by FY23F and BOL Jurong centre (732 beds) by 2025 (FY26F). Growth in Malaysia and China will come from the ramp-up of nursing homes in Puchong, Malaysia (138 beds), Chongqing, China (44 beds), Changshou, China (280 beds) and lastly, Chengdu, China (400 beds) by FY23F.
Firm earnings outlook, supported by government tender wins. We project Econ to achieve a net profit CAGR of 13% over FY21-FY24F and 15% over FY21-FY26F as contributions from the BOL centres in Henderson and Jurong kick in from FY23F and 2025 (FY26F) respectively.










(Non-SGX Report) Econ Healthcare (Asia) Limited - Long-Term Expansion Plans Intact

<div><em><strong>Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;</strong>SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</em></div>
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<h2>Econ Healthcare (Asia) Limited</h2>
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<h3>A Golden Silver Economy Play</h3>
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<p>Leading premium private nursing home operator in Singapore and Malaysia, with presence in China</p>
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<p>Beneficiary of aging population trends in Singapore, Malaysia, and China, &gt;10% CAGR from 2020 to 2024F</p>
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<p>Expect c. 12% net profit CAGR from FY21-FY24F, led by a c. 40% increase in bed capacity from 1,376 beds to 1,936 beds by FY24F</p>
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<p>Initiate coverage with BUY with TP of S$0.40 based on DCF, implying potential upside of 33%</p>
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<p><strong>Initiate coverage with BUY, TP of S$0.40.</strong> The stock is currently trading at undemanding valuation at 22.0x FY22F PE, below peers’ median of 23.9x.</p>
<p><strong>Beneficiary of aging population trends.</strong> The private nursing home industry is forecast to grow at a CAGR of 13.6% in Singapore, 11.5% in Malaysia and 16.6% in China from 2020 to 2024F. Econ Healthcare (Asia) Limited (“Econ”) is the leading premium private nursing home operator in Singapore and Malaysia, with a presence in China, and is a clear beneficiary.</p>
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Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.






Econ Healthcare (Asia) Limited




A Golden Silver Economy Play






Leading premium private nursing home operator in Singapore and Malaysia, with presence in China


Beneficiary of aging population trends in Singapore, Malaysia, and China, &gt;10% CAGR from 2020 to 2024F


Expect c. 12% net profit CAGR from FY21-FY24F, led by a c. 40% increase in bed capacity from 1,376 beds to 1,936 beds by FY24F


Initiate coverage with BUY with TP of S$0.40 based on DCF, implying potential upside of 33%






Initiate coverage with BUY, TP of S$0.40. The stock is currently trading at undemanding valuation at 22.0x FY22F PE, below peers’ median of 23.9x.
Beneficiary of aging population trends. The private nursing home industry is forecast to grow at a CAGR of 13.6% in Singapore, 11.5% in Malaysia and 16.6% in China from 2020 to 2024F. Econ Healthcare (Asia) Limited (“Econ”) is the leading premium private nursing home operator in Singapore and Malaysia, with a presence in China, and is a clear beneficiary.


















(Non-SGX Report) Econ Healthcare (Asia) Limited: A Golden Silver Economy Play

<figure class="editor-figure mceNonEditable"><img src="https://api2.sgx.com/sites/default/files/2021-08/EconHealthcare-CEO.jpg" class="editor-image img-responsive"></figure>
<div class="content-caption">Econhealthcare - CEO</div>
<p></p>
<p>Growing up in a kampong in Singapore in the 1960s, entrepreneur Ong Chu Poh learned early on what it means to show compassion, kindness and thoughtfulness.<br><br>On a routine trip to the market with his mother one day, Ong noticed a rock, about the size of a fist, in the middle of the gravel path. Busy pedestrians and cyclists were all trying to avoid the stone on their journeys.<br><br>“My mother asked me to move the stone to the side of the path, and I did so, but I was curious about her request. She simply told me that someone might trip over that rock and hurt themselves. When you can help someone with such a simple gesture, why not?” recalled the Founder, Executive Chairman and Group Chief Executive of SGX-listed ECON Healthcare (Asia) Ltd.<br><br>“My mother’s remarks left a huge impact on me - one that lasted till today - and over the years, her words have moulded my values of empathy, charity, generosity and respect.”<br><br>As a result, Ong was inspired to become a youth volunteer in the 1970s. Through that experience, he saw the need to improve healthcare services for the aged. Determined to make a difference and bring about better care for seniors, he left his job in a multinational company after raising enough capital to open ECON’s first nursing home in 1987, with a capacity of just 16 beds.<br><br>“It was very tough and I struggled, especially in the first two years. I was barely making ends meet and my savings were almost depleted,” Ong said.<br><br>“But I was fortunate to have a team of very dedicated and caring staff, and our efforts and sincerity eventually paid off. Over time, our business expanded through word-of-mouth referrals.”<br><br>In 2002, Ong received the Entrepreneur of The Year Award by Rotary-ASME. In the same year, he was awarded the Public Service Medal (Pingkat Batkti Masyarakat) by the Prime Minister’s Office of the Republic of Singapore for his dedication in serving the community.&nbsp;<br><br>In 2014, he was also conferred the Public Service Star (Bintang Bakti Masyarakat) by the Prime Minister's Office of the Republic of Singapore for his contributions to communities in the city-state.<br><br>Today, more than three decades later, ECON Healthcare is the largest private nursing home operator in Singapore and Malaysia by revenue, with an approximate market share of 26.9% and 43.2% respectively, according to Euromonitor data.<br><br>Meanwhile, the Group has secured a first-mover advantage in China. It is - if not the only one - among the few Singapore-based nursing home operators to have successfully entered the country’s eldercare industry and established working relationships with relevant government ministries, state-owned enterprises and private organisations.<br><br>Its first private nursing home in Chongqing commenced operations earlier this year. Awarded the Top Ten Innovation Project in Yuzhong Free-Trade-Zone (FTZ), this maiden facility will be the model for future nursing homes in China<br><br>ECON Healthcare has also secured two more projects - Chengdu and Changshou - which will boost capacity by 680 beds for its China operations. These two centres target to start operating by 2022.<br><br>“Our China growth plans are on track. Our vision is to expand our total bed capacity in China to approximately 5,000 within the next three to five years as we scale our know-how and expertise across the region,” Ong noted.<br><br>By 2025, the Group is expected to have 15 nursing homes - nine in Singapore, three in Malaysia, and three in China.<br><br><strong>Ties That Bind</strong><br><br>Looking ahead, the Group aims to be a premium brand in healthcare services in the Asia-Pacific region, recognised by customers for its holistic approach, personal touch and technological advancements.<br><br>A key differentiator is its East-West focus, which adopts the best of Eastern and Western medical philosophies to boost care efficiency and outcomes, Ong said.<br><br>“We aim to meet the demands of ageing populations in Singapore, Malaysia and China,” he added.<br><br>In terms of values, ECON Healthcare places a premium on family ties and empathy. Its motto - Family Caring for Families -&nbsp;defines how the Group conducts itself and interacts with both internal and external stakeholders.<br><br>“Caring and providing support for families lies at the core of our business, and care starts from the heart. This was the lesson I learned from my mother, and which was borne out during the Group’s foundation years,” Ong noted.<br><br>“We see many families having to make the difficult decision of placing their elderly in a nursing facility when they are not able to adequately provide for them in their own homes. What we do is to care - offer them empathy, as well as the peace of mind and assurance that their loved ones will be well-looked after.”<br><br>As for its operations, ECON Healthcare will utilise an asset-light business model, Ong said.&nbsp;<br><br>While focusing on its core strength of delivering quality nursing care services, the Group will leverage on its partnerships with landowners and/or governments who will bear the cost of constructing the facilities. The strategy also includes leasing suitable premises to set up these care centres and homes.<br><br>In Singapore, the Group will continue to participate in the Build-Own-Lease (BOL) scheme, which is the city-state’s key method in boosting nursing home capacity. Across the Causeway, the Group is exploring opportunities to develop a plot of land in Cheras into a senior care hub, riding on Malaysia’s ranking among the world’s top 10 retirement destinations.<br><br>“Our asset-light approach allows us to generate high investment returns and focus on the efficient deployment and optimisation of capital,” he added.<br><br><strong>The Talent Imperative</strong><br><br>In tandem with its growth ambitions, the Group faces talent recruitment and development challenges, Ong admitted.<br><br>“Singapore, like many developed nations, has a shortage of care staff. Being in the business of caring, our people are very important to us, and we continue to build upon our care and organisational culture, so as to nurture the ECON family,” he said.<br><br>“We make it a point to progressively cultivate our talent pool, for example, through e-learning platforms, which boost competency levels and career progression among our people, and aid in talent retention.”<br><br>COVID-19 has also thrown up a number of hurdles, not the least of which is ensuring the mental well-being of the Group’s employees.<br><br>“Not only do we have to step up our vigilance and react nimbly to various government containment measures during the pandemic, we have to safeguard the well-being and mental health of our people, who are at the frontlines caring for our seniors,” Ong pointed out.<br><br>“We continue to encourage and support our staff in our efforts to manage pandemic burn-out, so as to ensure they stay motivated, healthy and well.”<br><br>Beyond the day-to-day operations, Ong is also focused on grooming future leaders who can take the organisation to the next stage of growth. Two of his children are working in the Group - Deputy Chief Executive Ong Hui Ming and Head of Development Dr Ong Xin De, while the third is in the public healthcare sector.<br><br>“As I pass on my experiences and impart the values of family bonding, compassion and generosity to the next generation, I am also learning from them, in particular, how the young think,” he said with a laugh.<br><br>For the 67-year-old, the key touchstones remain filial piety and gratitude. His favourite Chinese proverb is 饮水思源 (yin shui si yuan), which means: “When you drink, remember the source”.&nbsp;<br><br>“In this age of globalisation and constant change, it’s important that we do not forget our roots or those who have done us good. And most importantly, as long as we’re able to help others, let’s do that!”<br><br><br><strong>ECON Healthcare (Asia) Ltd</strong><br><br>ECON Healthcare is the largest private nursing home operator in Singapore and Malaysia by revenue, with an approximate market share of 26.9% and 43.2% respectively, according to Euromonitor data. It is - if not the only one – also among the few Singapore-based nursing home operators to have successfully entered China’s eldercare industry. While its first private nursing home in Chongqing commenced operations earlier this year, the Group has also secured two more projects - Chengdu and Changshou – which are targeted to start operating by 2022. By 2025, the Group is expected to have 15 nursing homes - nine in Singapore, three in Malaysia, and three in China.&nbsp;<br><br>The company website is: <strong><a href="https://l.edm.sgx.com/rts/go2.aspx?h=27960&amp;tp=i-1NGB-Ii-cv-VKC7-1o-0-3E-VKC7-l6PN1WC0DD-1tFRH5" target="_blank" rel="noopener">www.econhealthcare.com</a></strong><br><br>Click&nbsp;<a href="https://l.edm.sgx.com/rts/go2.aspx?h=27961&amp;tp=i-1NGB-Ii-cv-VKC7-1o-0-3E-VKC7-l6PN1WC0DD-1tFRH5" target="_blank" rel="noopener"><strong>here</strong>&nbsp;</a>for the company's StockFacts page.<br><br>For the year ended 31 March 2021 financial results, click&nbsp;<a href="https://l.edm.sgx.com/rts/go2.aspx?h=27962&amp;tp=i-1NGB-Ii-cv-VKC7-1o-0-3E-VKC7-l6PN1WC0DD-1tFRH5" target="_blank" rel="noopener"><strong>here</strong></a>.<br><br>&nbsp;</p>
<p><strong>About&nbsp;kopi-C: the Company brew</strong></p>
<p><strong>Text: Jennifer Tan-Stanisic</strong><br><strong>Photo: Company file</strong><br><br><em>kopi-C&nbsp;</em>is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.<br><br>For previous editions of&nbsp;<em>kopi-C: the Company brew,</em>&nbsp;please click&nbsp;<a href="https://www.sgx.com/research-education/market-dialogues" target="_blank" rel="noopener">here</a>. &nbsp;<br><br>For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to&nbsp;<a href="https://www.sgx.com/jennifer.t@sgx.com" target="_blank" rel="noopener">jennifer.t@sgx.com</a>.</p>


Econhealthcare - CEO

Growing up in a kampong in Singapore in the 1960s, entrepreneur Ong Chu Poh learned early on what it means to show compassion, kindness and thoughtfulness.  On a routine trip to the market with his mother one day, Ong noticed a rock, about the size of a fist, in the middle of the gravel path. Busy pedestrians and cyclists were all trying to avoid the stone on their journeys.  “My mother asked me to move the stone to the side of the path, and I did so, but I was curious about her request. She simply told me that someone might trip over that rock and hurt themselves. When you can help someone with such a simple gesture, why not?” recalled the Founder, Executive Chairman and Group Chief Executive of SGX-listed ECON Healthcare (Asia) Ltd.  “My mother’s remarks left a huge impact on me - one that lasted till today - and over the years, her words have moulded my values of empathy, charity, generosity and respect.”  As a result, Ong was inspired to become a youth volunteer in the 1970s. Through that experience, he saw the need to improve healthcare services for the aged. Determined to make a difference and bring about better care for seniors, he left his job in a multinational company after raising enough capital to open ECON’s first nursing home in 1987, with a capacity of just 16 beds.  “It was very tough and I struggled, especially in the first two years. I was barely making ends meet and my savings were almost depleted,” Ong said.  “But I was fortunate to have a team of very dedicated and caring staff, and our efforts and sincerity eventually paid off. Over time, our business expanded through word-of-mouth referrals.”  In 2002, Ong received the Entrepreneur of The Year Award by Rotary-ASME. In the same year, he was awarded the Public Service Medal (Pingkat Batkti Masyarakat) by the Prime Minister’s Office of the Republic of Singapore for his dedication in serving the community.&nbsp;  In 2014, he was also conferred the Public Service Star (Bintang Bakti Masyarakat) by the Prime Minister's Office of the Republic of Singapore for his contributions to communities in the city-state.  Today, more than three decades later, ECON Healthcare is the largest private nursing home operator in Singapore and Malaysia by revenue, with an approximate market share of 26.9% and 43.2% respectively, according to Euromonitor data.  Meanwhile, the Group has secured a first-mover advantage in China. It is - if not the only one - among the few Singapore-based nursing home operators to have successfully entered the country’s eldercare industry and established working relationships with relevant government ministries, state-owned enterprises and private organisations.  Its first private nursing home in Chongqing commenced operations earlier this year. Awarded the Top Ten Innovation Project in Yuzhong Free-Trade-Zone (FTZ), this maiden facility will be the model for future nursing homes in China  ECON Healthcare has also secured two more projects - Chengdu and Changshou - which will boost capacity by 680 beds for its China operations. These two centres target to start operating by 2022.  “Our China growth plans are on track. Our vision is to expand our total bed capacity in China to approximately 5,000 within the next three to five years as we scale our know-how and expertise across the region,” Ong noted.  By 2025, the Group is expected to have 15 nursing homes - nine in Singapore, three in Malaysia, and three in China.  Ties That Bind  Looking ahead, the Group aims to be a premium brand in healthcare services in the Asia-Pacific region, recognised by customers for its holistic approach, personal touch and technological advancements.  A key differentiator is its East-West focus, which adopts the best of Eastern and Western medical philosophies to boost care efficiency and outcomes, Ong said.  “We aim to meet the demands of ageing populations in Singapore, Malaysia and China,” he added.  In terms of values, ECON Healthcare places a premium on family ties and empathy. Its motto - Family Caring for Families -&nbsp;defines how the Group conducts itself and interacts with both internal and external stakeholders.  “Caring and providing support for families lies at the core of our business, and care starts from the heart. This was the lesson I learned from my mother, and which was borne out during the Group’s foundation years,” Ong noted.  “We see many families having to make the difficult decision of placing their elderly in a nursing facility when they are not able to adequately provide for them in their own homes. What we do is to care - offer them empathy, as well as the peace of mind and assurance that their loved ones will be well-looked after.”  As for its operations, ECON Healthcare will utilise an asset-light business model, Ong said.&nbsp;  While focusing on its core strength of delivering quality nursing care services, the Group will leverage on its partnerships with landowners and/or governments who will bear the cost of constructing the facilities. The strategy also includes leasing suitable premises to set up these care centres and homes.  In Singapore, the Group will continue to participate in the Build-Own-Lease (BOL) scheme, which is the city-state’s key method in boosting nursing home capacity. Across the Causeway, the Group is exploring opportunities to develop a plot of land in Cheras into a senior care hub, riding on Malaysia’s ranking among the world’s top 10 retirement destinations.  “Our asset-light approach allows us to generate high investment returns and focus on the efficient deployment and optimisation of capital,” he added.  The Talent Imperative  In tandem with its growth ambitions, the Group faces talent recruitment and development challenges, Ong admitted.  “Singapore, like many developed nations, has a shortage of care staff. Being in the business of caring, our people are very important to us, and we continue to build upon our care and organisational culture, so as to nurture the ECON family,” he said.  “We make it a point to progressively cultivate our talent pool, for example, through e-learning platforms, which boost competency levels and career progression among our people, and aid in talent retention.”  COVID-19 has also thrown up a number of hurdles, not the least of which is ensuring the mental well-being of the Group’s employees.  “Not only do we have to step up our vigilance and react nimbly to various government containment measures during the pandemic, we have to safeguard the well-being and mental health of our people, who are at the frontlines caring for our seniors,” Ong pointed out.  “We continue to encourage and support our staff in our efforts to manage pandemic burn-out, so as to ensure they stay motivated, healthy and well.”  Beyond the day-to-day operations, Ong is also focused on grooming future leaders who can take the organisation to the next stage of growth. Two of his children are working in the Group - Deputy Chief Executive Ong Hui Ming and Head of Development Dr Ong Xin De, while the third is in the public healthcare sector.  “As I pass on my experiences and impart the values of family bonding, compassion and generosity to the next generation, I am also learning from them, in particular, how the young think,” he said with a laugh.  For the 67-year-old, the key touchstones remain filial piety and gratitude. His favourite Chinese proverb is 饮水思源 (yin shui si yuan), which means: “When you drink, remember the source”.&nbsp;  “In this age of globalisation and constant change, it’s important that we do not forget our roots or those who have done us good. And most importantly, as long as we’re able to help others, let’s do that!”   ECON Healthcare (Asia) Ltd  ECON Healthcare is the largest private nursing home operator in Singapore and Malaysia by revenue, with an approximate market share of 26.9% and 43.2% respectively, according to Euromonitor data. It is - if not the only one – also among the few Singapore-based nursing home operators to have successfully entered China’s eldercare industry. While its first private nursing home in Chongqing commenced operations earlier this year, the Group has also secured two more projects - Chengdu and Changshou – which are targeted to start operating by 2022. By 2025, the Group is expected to have 15 nursing homes - nine in Singapore, three in Malaysia, and three in China.&nbsp;  The company website is: www.econhealthcare.com  Click&nbsp;here&nbsp;for the company's StockFacts page.  For the year ended 31 March 2021 financial results, click&nbsp;here.  &nbsp;
About&nbsp;kopi-C: the Company brew
Text: Jennifer Tan-Stanisic Photo: Company file  kopi-C&nbsp;is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.  For previous editions of&nbsp;kopi-C: the Company brew,&nbsp;please click&nbsp;here. &nbsp;  For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to&nbsp;jennifer.t@sgx.com.

ECON Healthcare: Family Caring For Families

<ul>
<li><strong>Econ Healthcare, a private nursing home operator in Singapore and Malaysia, made its debut on the SGX Catalist. It currently operates 10 medicare centres and nursing homes in Singapore, Malaysia and China. &nbsp;</strong><br>&nbsp;</li>
<li><strong>Tapping on the increasing demand of nursing homes and senior care services, Econ Healthcare secured their expansion pipeline for their near-term growth, venturing into China with the establishment of Chongqing Nursing Home expected to commence in 2021 and securing rights to operate two upcoming medicare centres and nursing homes in Singapore (located at Henderson and Jurong East). </strong><br>&nbsp;</li>
<li><strong>While Econ Healthcare does not have a fixed dividend policy, the Board intends to distribute at least 35% of its net profit after tax attributable to shareholders generated in each of FY2021, FY2022 and FY2023.&nbsp;</strong></li>
</ul>
<p>&nbsp;</p>
<p>With a track record of 30 years, Econ Healthcare (Asia) Limited primarily provides residential nursing care, home care, rehabilitation, clinical as well as Traditional Chinese Medicine services in 10 medicare centres and nursing homes in Singapore, Malaysia and China, with the establishment of Chongqing Nursing Home, which is expected to commence operations in 2021.</p>
<p>According to Euromonitor, Econ Healthcare is the largest private nursing home operator in Singapore and Malaysia by revenue with a market share of 26.9% and 43.2% respectively.</p>
<figure class="editor-figure mceNonEditable"><img src="https://api2.sgx.com/sites/default/files/2021-04/Econ%20Health%20Figures_0.PNG" class="editor-image img-responsive"></figure>
<div class="content-caption">Econ Healthcare Figures</div>
<p></p>
<p>In Singapore, Econ Healthcare has also been appointed as an operator under the Build-Own-Lease (BOL) scheme for two upcoming nursing homes – ECON Medicare Centre and Nursing Home in Henderson and Jurong East – which will increase total bed capacity from 1,376 to 2,388 by 2025. The Group has an average of 1,094 residents (in 6M2020) and average occupancy rates of 94.1% in Singapore and 75.5% in Malaysia as at 30 September 2020. &nbsp;</p>
<p>&nbsp;</p>
<p>Econ Healthcare operates 2 key business segments:</p>
<ol>
<li><strong>Medicare Centres and Nursing Homes</strong>
<ul>
<li>Residential nursing care services</li>
<li>Rehabilitation Services and Traditional Chinese Medicine (TCM) treatments</li>
<li>Clinical services</li>
<li>Home care services</li>
</ul>
</li>
<li><strong>Other Operations and Ancillary Services</strong>
<ul>
<li>Healthcare training services</li>
<li>Provision of management services</li>
<li>Ambulance services</li>
<li>TCM services</li>
<li>Operation of senior activity centres</li>
</ul>
</li>
</ol>
<p>&nbsp;</p>
<p>The Group believes that it has competitive strengths in these areas, namely:</p>
<ul>
<li>Leading private nursing home operator, well positioned to capitalize on the growing ageing population in the region</li>
<li>“Econ” brand name is well-recognised and trusted with a track record of award categories, and strives to be a Centre of Excellence for Eldercare</li>
<li>Strong operational know-how and track record of 30 years</li>
</ul>
<p>&nbsp;</p>
<p><strong>Business Strategies and Future Plans</strong></p>
<ol>
<li><strong>Asset-light strategy to scale up future expansion:</strong> Through (i) leasing premises at locations deemed appropriate for centres and homes and entering into leasing agreements to operate such facilities at these locations, and (ii) Partnerships with landowners who will bear the cost of constructing buildings.</li>
<li><strong>Expand business operations organically through strategic collaborations: </strong>
<ul>
<li><strong>Singapore</strong>: BOL Scheme is a key strategy of the Singapore Government to increase nursing home bed capacity by bearing development costs and tenders the operating rights to both private and voluntary&nbsp; welfare organisations (VWO) operators. Being the first private operator to be appointed by MOH under the BOL scheme in 2011, &nbsp;Econ Healthcare will continue to participate in tenders for such opportunities.</li>
<li><strong>Malaysia</strong>: Continue to source for strategic locations for centres and homes due to lower costs compared to Singapore. According to Euromonitor, Malaysia will be one of the top 10 retirement destinations in the World. Econ Healthcare will also explore opportunities with developers and investors to develop an existing land plot in Cheras which it owns into a senior care hub.</li>
<li><strong>China</strong>: Econ Healthcare will explore opportunities to provide healthcare and eldercare training services to healthcare professionals in China. Leveraging on the inter-government China-Singapore (Chongqing) demonstration Initiative on Strategic Connectivity, Econ Healthcare has entered into and/or are in advanced discussions to enter into join ventures with local partners.</li>
</ul>
</li>
<li><strong>Enhance productivity through human capital investment, and technology and innovations</strong>: Autonomous mobile robots, indoor positioning technology integrated with fall detection and an integrated system for seamless care transitions and integration of care with community care partners are examples of technology innovations that Econ Healthcare is involved or plan to invest in.</li>
<li><strong>Upgrading of existing facilities: </strong>Econ Healthcare plans to upgrade existing facilities and equipment used at centres and homes to improve their service environment, service quality and service productivity simultaneously to achieve a holistic care for residents.</li>
</ol>
<p>&nbsp;</p>
<p><strong>Key Risks (See Page 26 of the Offer Document for more risk factors)</strong></p>
<ul>
<li>Business operations are subject to extensive and evolving government laws, regulations, licensing and accreditation requirements, and the Group could suffer penalties, additional costs and restrictions to its operations if it fails to comply.</li>
<li>Subject to various licensing requirements and its licences are subject to regular renewal, and the Group may not be able to obtain, maintain or renew such licences on a timely basis or at all.</li>
<li>The Group may be materially and adversely affected by spread of diseases or an outbreak of any contagious or virulent diseases and pandemics/epidemics.</li>
</ul>
<p>&nbsp;</p>
<p><strong>Financials &amp; Recommended Dividends</strong></p>
<ul>
<li>Econ Healthcare’s recorded revenue are S$24.3 million, S$22.4 million and S$21.9 million for FY2018, FY2019 and FY2020 respectively while revenue for 6M2021 (unaudited) is S$10.2 million.</li>
<li>In FY2020, revenues from “Medicare Centres and Nursing Homes” operations contributed S$19.8 million, while “Other Operations and Ancillary Services” contributed S$2.1 million. This accounts for 53.1% and 5.6% of Econ Healthcare’s total revenue respectively. The remaining 41.3% of revenue is from “Operating Subvention Grants”.</li>
<li>The Group does not have a fixed dividend policy. However, the Board intends to recommend dividends of at least 35% of net profit after tax generated in each of FY2021, FY2022 and FY2023.</li>
</ul>
<figure class="editor-figure mceNonEditable"><img src="https://api2.sgx.com/sites/default/files/2021-04/Econ%20Healthcare%20Financials.PNG" class="editor-image img-responsive"></figure>
<div class="content-caption">Econ Healthcare Financials</div>
<p></p>
<p><strong>Additional Information from Offer Document</strong> <strong>(<a href="https://links.sgx.com/FileOpen/Econ%20Healthcare%20(Asia)%20Limited%20-%20Offer%20Document.ashx?App=IPO&amp;FileID=6276" target="_blank" rel="noopener">link</a>)</strong></p>
<p>&nbsp;</p>
<p><strong>Company Background</strong></p>
<p>Founded and led by Mr Ong Chu Poh, Executive Chairman and Group Chief Executive Officer, Econ Healthcare established their first medicare centre and nursing home in Malaysia in 2004. As at the Latest Practicable Date (12 March 2021), Econ Healthcare operates 10 medicare centres and nursing homes in Singapore, with a total bed capacity of 1,376. After the necessary licences and approvals are granted, Econ Healthcare is looking to commence operations in China under the Chongqing Nursing Home in 2021.</p>
<p>Econ Healthcare offers an eco-system of care and provide a wide range of services encompassing aspects of eldercare to support families and it strives to be the centre of excellence for Eldercare in Singapore and Malaysia. Econ Healthcare won several accolades over the years, including the first nursing home industry to be awarded the Singapore Service Class Certification, and 46 awards from the Silver, Gold and Star award categories at the Singapore Health Quality Service Awards in 2020 presented to employees.</p>
<p>&nbsp;</p>
<p><strong>IPO details</strong></p>
<ul>
<li>Offering price at S$0.28 per Offering Share</li>
<li>50.0 million Offering Shares which consist of:
<ul>
<li>48.2 million Placement Shares</li>
<li>1.8 million Public Offer Shares</li>
</ul>
</li>
<li>Estimated IPO market capitalisation at S$72.0 million.</li>
<li>Use of gross proceeds (S$14.0 million):
<ul>
<li><em>S$7.5 million</em> – Expansion plans in Singapore as well as overseas through, among others, joint ventures, strategic collaborations, mergers and acquisitions, or investments</li>
<li><em>S$2.0 million</em> – Upgrading of existing medicare centres and nursing homes and other facilities, including equipment and IT infrastructure</li>
<li><em>S$2.0 million</em> – General corporate and working capital purposes</li>
<li><em>S$2.5 million</em> – Payment of underwriting and placement commissions and offering expenses</li>
</ul>
</li>
</ul>


Econ Healthcare, a private nursing home operator in Singapore and Malaysia, made its debut on the SGX Catalist. It currently operates 10 medicare centres and nursing homes in Singapore, Malaysia and China. &nbsp; &nbsp;
Tapping on the increasing demand of nursing homes and senior care services, Econ Healthcare secured their expansion pipeline for their near-term growth, venturing into China with the establishment of Chongqing Nursing Home expected to commence in 2021 and securing rights to operate two upcoming medicare centres and nursing homes in Singapore (located at Henderson and Jurong East).  &nbsp;
While Econ Healthcare does not have a fixed dividend policy, the Board intends to distribute at least 35% of its net profit after tax attributable to shareholders generated in each of FY2021, FY2022 and FY2023.&nbsp;

&nbsp;
With a track record of 30 years, Econ Healthcare (Asia) Limited primarily provides residential nursing care, home care, rehabilitation, clinical as well as Traditional Chinese Medicine services in 10 medicare centres and nursing homes in Singapore, Malaysia and China, with the establishment of Chongqing Nursing Home, which is expected to commence operations in 2021.
According to Euromonitor, Econ Healthcare is the largest private nursing home operator in Singapore and Malaysia by revenue with a market share of 26.9% and 43.2% respectively.

Econ Healthcare Figures

In Singapore, Econ Healthcare has also been appointed as an operator under the Build-Own-Lease (BOL) scheme for two upcoming nursing homes – ECON Medicare Centre and Nursing Home in Henderson and Jurong East – which will increase total bed capacity from 1,376 to 2,388 by 2025. The Group has an average of 1,094 residents (in 6M2020) and average occupancy rates of 94.1% in Singapore and 75.5% in Malaysia as at 30 September 2020. &nbsp;
&nbsp;
Econ Healthcare operates 2 key business segments:

Medicare Centres and Nursing Homes

Residential nursing care services
Rehabilitation Services and Traditional Chinese Medicine (TCM) treatments
Clinical services
Home care services


Other Operations and Ancillary Services

Healthcare training services
Provision of management services
Ambulance services
TCM services
Operation of senior activity centres



&nbsp;
The Group believes that it has competitive strengths in these areas, namely:

Leading private nursing home operator, well positioned to capitalize on the growing ageing population in the region
“Econ” brand name is well-recognised and trusted with a track record of award categories, and strives to be a Centre of Excellence for Eldercare
Strong operational know-how and track record of 30 years

&nbsp;
Business Strategies and Future Plans

Asset-light strategy to scale up future expansion: Through (i) leasing premises at locations deemed appropriate for centres and homes and entering into leasing agreements to operate such facilities at these locations, and (ii) Partnerships with landowners who will bear the cost of constructing buildings.
Expand business operations organically through strategic collaborations: 

Singapore: BOL Scheme is a key strategy of the Singapore Government to increase nursing home bed capacity by bearing development costs and tenders the operating rights to both private and voluntary&nbsp; welfare organisations (VWO) operators. Being the first private operator to be appointed by MOH under the BOL scheme in 2011, &nbsp;Econ Healthcare will continue to participate in tenders for such opportunities.
Malaysia: Continue to source for strategic locations for centres and homes due to lower costs compared to Singapore. According to Euromonitor, Malaysia will be one of the top 10 retirement destinations in the World. Econ Healthcare will also explore opportunities with developers and investors to develop an existing land plot in Cheras which it owns into a senior care hub.
China: Econ Healthcare will explore opportunities to provide healthcare and eldercare training services to healthcare professionals in China. Leveraging on the inter-government China-Singapore (Chongqing) demonstration Initiative on Strategic Connectivity, Econ Healthcare has entered into and/or are in advanced discussions to enter into join ventures with local partners.


Enhance productivity through human capital investment, and technology and innovations: Autonomous mobile robots, indoor positioning technology integrated with fall detection and an integrated system for seamless care transitions and integration of care with community care partners are examples of technology innovations that Econ Healthcare is involved or plan to invest in.
Upgrading of existing facilities: Econ Healthcare plans to upgrade existing facilities and equipment used at centres and homes to improve their service environment, service quality and service productivity simultaneously to achieve a holistic care for residents.

&nbsp;
Key Risks (See Page 26 of the Offer Document for more risk factors)

Business operations are subject to extensive and evolving government laws, regulations, licensing and accreditation requirements, and the Group could suffer penalties, additional costs and restrictions to its operations if it fails to comply.
Subject to various licensing requirements and its licences are subject to regular renewal, and the Group may not be able to obtain, maintain or renew such licences on a timely basis or at all.
The Group may be materially and adversely affected by spread of diseases or an outbreak of any contagious or virulent diseases and pandemics/epidemics.

&nbsp;
Financials &amp; Recommended Dividends

Econ Healthcare’s recorded revenue are S$24.3 million, S$22.4 million and S$21.9 million for FY2018, FY2019 and FY2020 respectively while revenue for 6M2021 (unaudited) is S$10.2 million.
In FY2020, revenues from “Medicare Centres and Nursing Homes” operations contributed S$19.8 million, while “Other Operations and Ancillary Services” contributed S$2.1 million. This accounts for 53.1% and 5.6% of Econ Healthcare’s total revenue respectively. The remaining 41.3% of revenue is from “Operating Subvention Grants”.
The Group does not have a fixed dividend policy. However, the Board intends to recommend dividends of at least 35% of net profit after tax generated in each of FY2021, FY2022 and FY2023.


Econ Healthcare Financials

Additional Information from Offer Document (link)
&nbsp;
Company Background
Founded and led by Mr Ong Chu Poh, Executive Chairman and Group Chief Executive Officer, Econ Healthcare established their first medicare centre and nursing home in Malaysia in 2004. As at the Latest Practicable Date (12 March 2021), Econ Healthcare operates 10 medicare centres and nursing homes in Singapore, with a total bed capacity of 1,376. After the necessary licences and approvals are granted, Econ Healthcare is looking to commence operations in China under the Chongqing Nursing Home in 2021.
Econ Healthcare offers an eco-system of care and provide a wide range of services encompassing aspects of eldercare to support families and it strives to be the centre of excellence for Eldercare in Singapore and Malaysia. Econ Healthcare won several accolades over the years, including the first nursing home industry to be awarded the Singapore Service Class Certification, and 46 awards from the Silver, Gold and Star award categories at the Singapore Health Quality Service Awards in 2020 presented to employees.
&nbsp;
IPO details

Offering price at S$0.28 per Offering Share
50.0 million Offering Shares which consist of:

48.2 million Placement Shares
1.8 million Public Offer Shares


Estimated IPO market capitalisation at S$72.0 million.
Use of gross proceeds (S$14.0 million):

S$7.5 million – Expansion plans in Singapore as well as overseas through, among others, joint ventures, strategic collaborations, mergers and acquisitions, or investments
S$2.0 million – Upgrading of existing medicare centres and nursing homes and other facilities, including equipment and IT infrastructure
S$2.0 million – General corporate and working capital purposes
S$2.5 million – Payment of underwriting and placement commissions and offering expenses




Econ Healthcare – Largest Private Nursing Home Operator in SG & MY – Debuts on SGX

Singapore

Econ Healthcare (Asia) is a leading private nursing home operator in Singapore and Malaysia, with a presence in China. The company provides residential nursing care, home care, rehabilitation, clinical services, and Traditional Chinese Medicine (TCM) treatments. It also offers healthcare training services and operates senior activity centers. Headquartered in Singapore, the company was established in 1987.

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