Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<ul>
<li>UMP Healthcare ("UMP") is Hong Kong's leading private medical service network. Its network spans 1100+ service providers, 1mm+ scheme members, 2000+ contract customers, and over 1.13mm+ annual clinic visits.</li>
<li>Despite the consistent track record, UMP trades at a 61% discount to its IPO price, 6x PE, and 8% yield with 45% of its market cap in net cash. </li>
<li>We see ingredients in place for a multi-year re-rate, backed by HK's new Healthcare Policy and the company's strategic tilt towards higher margin service lines supporting future profit growth.</li>
</ul>


UMP Healthcare ("UMP") is Hong Kong's leading private medical service network. Its network spans 1100+ service providers, 1mm+ scheme members, 2000+ contract customers, and over 1.13mm+ annual clinic visits.
Despite the consistent track record, UMP trades at a 61% discount to its IPO price, 6x PE, and 8% yield with 45% of its market cap in net cash. 
We see ingredients in place for a multi-year re-rate, backed by HK's new Healthcare Policy and the company's strategic tilt towards higher margin service lines supporting future profit growth.


UMP Healthcare: An Undervalued Gem with a Promising Future in Hong Kong's Healthcare Market

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ump-healthcare-holdings-ltd" target="_blank" data-smartkarma-citation="entities:21005:1" rel="noopener">UMP Healthcare (722 HK)</a> reported a Revenue/PAT growth of -1.2%/45.7% YoY as cost-cutting initiatives bore fruit for the company in H1 FY25. </li>
<li>Net cash and investments reached 294 mn HKD (representing 88% of the market capitalization) due to robust operating profits and excellent working capital control. </li>
<li>Trading at 7.7x PE and 0.4x EV-EBITDA, with an 8% dividend yield, there is massive value in the name. The key lies in improving ROCE, which remains low- single digit. </li>
</ul>



UMP Healthcare (722 HK) reported a Revenue/PAT growth of -1.2%/45.7% YoY as cost-cutting initiatives bore fruit for the company in H1 FY25. 
Net cash and investments reached 294 mn HKD (representing 88% of the market capitalization) due to robust operating profits and excellent working capital control. 
Trading at 7.7x PE and 0.4x EV-EBITDA, with an 8% dividend yield, there is massive value in the name. The key lies in improving ROCE, which remains low- single digit. 


UMP Healthcare (722 HK): Solid H1 2025, Cost-Cutting Initiatives Bearing Fruit

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ump-healthcare-holdings-ltd" target="_blank" rel="noopener">UMP Healthcare (722 HK)</a> will report its results in late February. We estimate low single-digit revenue growth of 3% YoY, in line with the past two semiannuals.</li>
<li>We flagged cost-cutting initiatives in <a href="https://www.smartkarma.com/insights/ump-healthcare-722-hk-postcard-from-hong-kong-and-webinar-updates" target="_blank" data-smartkarma-citation="insights:166790" rel="noopener">UMP Healthcare (722 HK): Postcard From Hong Kong and Webinar Updates</a>, which would result in 25% YoY profit growth. </li>
<li>Trading at 6.4x FY25e PE, with a 10% dividend yield and 85% of the market capitalization in net cash and investments, the stock has the potential to double. </li>
</ul>



UMP Healthcare (722 HK) will report its results in late February. We estimate low single-digit revenue growth of 3% YoY, in line with the past two semiannuals.
We flagged cost-cutting initiatives in UMP Healthcare (722 HK): Postcard From Hong Kong and Webinar Updates, which would result in 25% YoY profit growth. 
Trading at 6.4x FY25e PE, with a 10% dividend yield and 85% of the market capitalization in net cash and investments, the stock has the potential to double. 


UMP Healthcare (722 HK): Earnings Preview for H1 FY25

<ul>
<li>We met with <a href="https://www.smartkarma.com/entities/ump-healthcare-holdings-ltd" target="_blank" rel="noopener">UMP Healthcare (722 HK)</a> in Hong Kong. We believe management's cost control initiatives are bearing fruit and will see an inflection in earnings in FY25. </li>
<li>The weak consumption sentiment is setting a landscape for asset disposals, such as <a href="https://www.smartkarma.com/entities/ec-healthcare" target="_blank" rel="noopener">EC Healthcare (2138 HK)</a> 's <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/1106/2024110601562.pdf" target="_blank" rel="noopener">436 mn HKD</a> disposal of medical imaging to AIA. </li>
<li>We believe the company is a multi-bagger trading at 6.8x PE FY25e. It has ~80% of its market cap in cash (260+ mn HKD) and a ~10% dividend yield. </li>
</ul>


We met with UMP Healthcare (722 HK) in Hong Kong. We believe management's cost control initiatives are bearing fruit and will see an inflection in earnings in FY25. 
The weak consumption sentiment is setting a landscape for asset disposals, such as EC Healthcare (2138 HK) 's 436 mn HKD disposal of medical imaging to AIA. 
We believe the company is a multi-bagger trading at 6.8x PE FY25e. It has ~80% of its market cap in cash (260+ mn HKD) and a ~10% dividend yield. 


UMP Healthcare (722 HK): Postcard From Hong Kong and Webinar Updates

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

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Research Reinvented

<p>For our next Corporate Webinar, we are glad to welcome UMP Healthcare’s Chief Financial Officer and Company Secretary, Patrick Cheung. </p>
<p>In the upcoming webinar, Patrick will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, <a href="https://www.smartkarma.com/profiles/sameer-taneja-a0539e0c-84dd-4e66-9c40-6e598edfb4c5/analysis" target="_blank" rel="noopener">Sameer Taneja</a>. The Corporate Webinar will include a live Q&amp;A session.</p>
<h3>The webinar will be hosted on Wednesday, 23 October 2024, 15:00 SGT/HKT.</h3>
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<h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=81201150118" target="_blank" rel="noopener">Register for the Webinar here</a></h2>
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<h3>About UMP Healthcare</h3>
<div>Founded in 1990, UMP Healthcare is a medical group listed on the main board of the Hong Kong Stock Exchange (stock code 722. HK) and is one of the leading comprehensive healthcare service platforms in the Hong Kong market. They are committed to "providing comprehensive, diversified, and coordinated care for everyone" by creating a network of high-quality and effective medical services for patients, payers, providers, and partners.</div>
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<div>Along with providing healthcare services that address a wide range of individual needs, UMP closely works with more than 2,000 local and international businesses and insurance organizations to establish and administer corporate healthcare benefit programs for members. The medical service network spans over 1,000 self-owned and affiliated institutions across Hong Kong, Macau, and Mainland China, offering services such as family medicine, specialist consultation, dental care, diagnostic imaging and laboratory testing, preventive medicine and health examination, physical therapy, day surgery, and endoscopy, among others. In 2024, the annual volume of outpatient visits under UMP exceeded 1.3 million.</div>

For our next Corporate Webinar, we are glad to welcome UMP Healthcare’s Chief Financial Officer and Company Secretary, Patrick Cheung. 
In the upcoming webinar, Patrick will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Sameer Taneja. The Corporate Webinar will include a live Q&amp;A session.
The webinar will be hosted on Wednesday, 23 October 2024, 15:00 SGT/HKT.



























Register for the Webinar here



























About UMP Healthcare
Founded in 1990, UMP Healthcare is a medical group listed on the main board of the Hong Kong Stock Exchange (stock code 722. HK) and is one of the leading comprehensive healthcare service platforms in the Hong Kong market. They are committed to "providing comprehensive, diversified, and coordinated care for everyone" by creating a network of high-quality and effective medical services for patients, payers, providers, and partners.
 
Along with providing healthcare services that address a wide range of individual needs, UMP closely works with more than 2,000 local and international businesses and insurance organizations to establish and administer corporate healthcare benefit programs for members. The medical service network spans over 1,000 self-owned and affiliated institutions across Hong Kong, Macau, and Mainland China, offering services such as family medicine, specialist consultation, dental care, diagnostic imaging and laboratory testing, preventive medicine and health examination, physical therapy, day surgery, and endoscopy, among others. In 2024, the annual volume of outpatient visits under UMP exceeded 1.3 million.

Smartkarma Corporate Webinar | UMP Healthcare: Undervalued Gem in Hong Kong's Healthcare Market

Hong Kong

UMP Healthcare Holdings Ltd. offers healthcare solutions provider. The Company provides services for medical and dental needs. UMP serves both contract and plan customers.

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UMP Healthcare (722 HK)

UMP Healthcare: An Undervalued Gem with a Promising Future in Hong Kong's Healthcare Market

UMP Healthcare is HK's leading private medical service network. Despite the impressive footprint and consistent track record, it trades at 6x PE...

Sameer Taneja