Investment Analysis for Singapore Institute of Advanced Medicine Holdings Ltd. (SIAMH)
Date of Report: The financial statements cover the fiscal year ending June 30, 2024, and are unaudited.
1. Business Description
Core Operations and Segments:
Singapore Institute of Advanced Medicine Holdings Ltd. (SIAMH) operates through three primary segments:
- Medical Diagnostics and Treatments: Offers services such as cancer diagnostics, general health screening, and aesthetic services.
- Radiation Therapy and Medical Oncology Services: Provides advanced proton beam therapy, photon radiation therapy, and medical oncology.
- Investment Holding: The company engages in activities beyond core medical services for diversified investments.
Geographic Footprint:
SIAMH is domiciled in Singapore and conducts its core operations from this region, making it focused on the Southeast Asian healthcare market, with potential for patient flows from nearby countries.
2. Industry Position and Competitors
Position in Industry and Competitors:
SIAMH’s competitive edge lies in its pioneering proton beam therapy, which started in 2023, positioning it ahead in specialized cancer treatment within the region. Competitors include other advanced medical service providers in Southeast Asia, but SIAMH’s investment in cutting-edge technology grants it a niche in oncology.
Market Share and Revenue Streams:
The company’s revenue primarily stems from medical diagnostics and cancer therapy. With the recent introduction of proton therapy, revenue has grown, albeit moderately, at 3% over the past year. This expansion potentially positions SIAMH for increased market share in Southeast Asian oncology services.
3. Financial Statement Analysis
Income Statement Highlights
- Revenue Increase: SIAMH recorded a revenue of SGD 16.65 million for FY2024, marking a 3% increase year-over-year, primarily from oncology services.
- Significant Losses: The company reported a substantial increase in losses, totaling SGD 37.44 million, a 108% increase from the previous year’s SGD 18.07 million. This loss stemmed from higher finance costs, fair value losses on derivative liabilities, and significant depreciation.
Balance Sheet Highlights
- Equity and Liabilities: Share capital increased substantially to SGD 190.86 million from SGD 104.84 million due to share issuances.
- Net Asset Value: Group net assets increased to SGD 81.74 million, reflecting strategic shareholder support and improved equity but also highlighting negative operating cash flows.
Cash Flow Highlights
- Operating Cash Flow: Net cash used in operations reached SGD 12.93 million, driven by significant finance costs and increased depreciation.
- Financing Activities: The company raised SGD 5.30 million net from financing, buoyed by shareholder loans and the issuance of shares.
4. Key Investment Points
Reasons to Invest
- Unique Service Offering: Proton beam therapy positions SIAMH in a specialized market, potentially boosting patient inflow and long-term profitability.
- Strategic Financial Support: Continued financial backing from shareholders enhances SIAMH’s resilience, enabling it to navigate liquidity challenges effectively.
Reasons Not to Invest
- High Operating Losses and Cash Burn: Significant losses and negative operating cash flows indicate operational inefficiencies and high costs, raising concerns about the path to profitability.
- Debt Dependency: High finance costs and dependency on loans highlight vulnerability to interest rate fluctuations and investor dilution risks.
5. Special Initiatives to Improve Profitability
The company has streamlined professional fees related to IPO listings and reduced employee compensation due to improved efficiency. Additionally, SIAMH anticipates increased demand for its advanced oncology services, particularly following its designation by Novartis for Pluvicto treatment.
6. Investor Recommendations
For Current Investors:
Hold, with caution. The potential for market growth in advanced oncology services is promising, but the high operational losses and cash burn suggest careful monitoring of financial health.
For Potential Investors:
Consider a cautious approach. While SIAMH offers specialized medical services with growth potential, the significant losses and dependency on financing pose risks. Prospective investors may await further evidence of operational efficiency and patient demand for oncology services.
Disclaimer: This analysis does not constitute financial advice. Investors should consider their risk tolerance and consult a financial advisor before making investment decisions.
