Singapore Paincare worth up to S$0.37 a share, more than double its privatisation offer: Sias
In a statement released on Wednesday (Jun 4), Sias noted that the company could be worth up to S$0.37 per share, which is more than double its privatisation offer of S$0.16 per share.
Especially for those who are able to afford waiting, Sias recommends that shareholders wait for the independent financial adviser (IFA) report before making any moves.
It also noted that the deal is via a scheme of arrangement, which means that approval of the scheme has to first be approved by a majority vote at the scheme meeting – and by more than 75 per cent in value of the shares held by shareholders voting.
There have been past instances where shareholders sought slight gains by selling their shares in the open market before IFA's opinion was released, said Sias.
'Shareholders who sold (shares in the open market) will not have recourse if there is a subsequent upward revision in the offer price,' Sias warned.
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In its released statement, Sias highlighted that in July 2020, the medical services company listed at S$0.22 per share, when the Straits Times Index (STI) was trading at around 2,500.
Now, when the STI is up by more than 50 per cent at 3,900, it wishes to delist at S$0.16 per share.
Furthermore, its initial public offering (IPO) price was S$0.22, a 123 per cent premium to the group's unaudited net asset value (NAV) of about S$0.0986 per share on Dec 31, 2019. This was based on the post-placement share capital and after adjusting for net proceeds due to the company from the placement.
Now, the price offered under the scheme of arrangement is instead at a slight discount to the company's NAV of S$0.166 per share as at Jun 30, 2024. Sias also noted that Singapore Paincare's unaudited NAV as at end-December 2024 stood at S$0.163 per share.
Therefore, if the same IPO premium was to be applied now, the privatisation price should be around S$0.36 to S$0.37 per share.
Sias further noted that 'well-managed healthcare companies generally trade at premiums to their NAV'.
'Sias would like to remind all offerors to treat shareholders fairly, and not to forget their promises made at the IPO. As such, they should therefore make offers that are fair and reasonable when subsequently delisting,' said David Gerald, founder, president and chief executive of Sias.
'It is also worth remembering that for a delisting to take place, the IFA has to conclude that the offer is both fair and reasonable,' he added. 'All told, it would therefore be advisable to wait for the IFA's opinion.'
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Business Times
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The research team calls it 'a rare high-growth name on the Singapore market', underpinned by its dominant position in the business-to-business wealth platform space, as well as fintech operations in digital banking and e-pension administration. Parkway Life Reit, which manages healthcare and senior living properties, is favoured for its 'impeccable track record of steady growth' since IPO without the need to raise funds. It has limited downside risk with the interest rate and foreign exchange hedged until 2029. The research team expects a big jump in the Reit's Singapore rental growth in 2026 once upgrading works at Mount Elizabeth Hospital in Orchard are completed. Potential growth is seen in the Reit's maiden acquisition of 11 nursing homes in France. StarHub could grab more consumer mobile market share in 2025, and boost its service revenue, Macquarie said. The telco is on a lookout for mergers and acquisitions, which will position it well during a consolidation. Among the large-cap stocks, Macquarie's top picks are OCBC, Sembcorp Industries, ST Engineering, CapitaLand Ascendas Reit, DFI Retail and Keppel DC Reit, which was included in the STI in June. Local brokerage and research house UOB KayHian's list of potential beneficiaries includes Centurion, which owns, develops and manages worker and student accommodations; NetLink Trust, which operates the passive fibre network infrastructure of Singapore's Nationwide Broadband Network; Raffles Medical; supermarket operator Sheng Siong; Jardine Cycle & Carriage; Olam; CapitaLand India Trust; Keppel Infrastructure Trust and SIA Engineering. Maybank Securities' research head Thilan Wickramasinghe believes small and mid-cap companies with stronger corporate governance credentials are likely to attract more investments. Couple this with trading liquidity, growth and balance sheet strength, 18 companies stood out for Maybank Securities: AEM Holdings, Nanofilm Technologies, Centurion, UMS Integration, CSE Global, Frencken Group, ComfortDelGro, First Resources, SingPost, Golden Agri-Resources, Sheng Siong, Sats, iFast, Yangzijiang Financial, SIA Engineering, Food Empire, StarHub and Riverstone Holdings. While the Government's reforms are ambitious, bear in mind that the liquidity gaps in the small and mid-cap segment will not close overnight. Global funds may be slow to increase Singapore allocations given persistent worldwide uncertainty and limited index weightings. The effectiveness of tax incentives and regulatory changes will depend on sustained execution and market buy-in.
