Singapore O&G Ltd

[Nick]

Why does the doctors in SOG want to ipo?

Their business isnt really scalable as its limited by labour. They dont need much to raise much capital.
Wouldn't they be better off doing what they have been doing before as a private enterprise and therefore do not need to share any profits with other shareholders and keeping all to themselves?

Then u may say, they are cashing out..but the money raised isnt that much and i am sure they earn much more..

Listing now, they are saddled with more adminstration work.

Just weird.

And the dependency of apparently some super star doctors spell high risk...if they leave what happens to SOG.

Else these superstars need to be paid super premium for them to stay.

I have to say that you are right about scalability. I cant fathom the rate of increase in patient counts. For growth to occur, there has to be:
1. Patient numbers
2. Room for margin widening
3. Lower cost.

Patient numbers may be challenging with public hospitals and also rmg n parkway offering full suite of medical services. Sog cant bundle services like rmg n parkway.

Margin widening also not so easy. I dont have a kid. As an outsider, cant comprehend how much wider margins can go. If margins too wide, it will have after effect on fees and prices. Not so ideal given the competition from rmg n parkway.

Cost cant be much lower. Superstar docs cost a premium. And with listing costs, its one tough biz. May be dental biz easier. More mouths to maintain. With longer average life spans, dentistry cant do too badly.

Just a.few thoughts.

I view it differently. We are not simply buying a healthcare operation. Rather, this is akin to investing in a healthcare professional (the trio) and the market capitalization is the PV of their income stream. Personally, this is why the PE of Talkmed and SOG (at IPO) is in their low teens as compared to healthcare operators whose PE lies over 20. The revenue of these businesses are 'salary of the professionals'. The margins are high since nobody depreciates human life in the accounting world (yet). Perhaps one day, we can start investing in football stars too haha ! This is my own view of their business model. I intend to apply for the IPO. I think the yield will prove to be attractive to many investors coupled with Talkmed stellar performance post IPO. Feel free to point out otherwise.