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HMI Strives Forth With Service Excellence
Corporate Digest | 17 June 2011
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By: Gerald Teo
Articles (40) Profile

Hitting yet another record revenue of RM85.6m in 1H11, Health Management International (HMI) appears poised to achieve a new level of top line figure for its forthcoming full year result ended 30 Jun-11. It chalked up a robust $58.6m (approximately RM139.5m) of revenue in FY10, representing a 17% growth from the preceding year.

Undaunted by the lackluster performance of its bottom line, which is currently in the red, HMI highlighted during an interview with Shares Investment (Singapore) its plans to increase the patient capacity to its hospitals while maintaining high quality in service.

Ramping Up Its Growth Engines
Apart from its education segment, which contributes only 5% to its overall revenue, HMI’s main revenue driver is its healthcare division. HMI currently operates 2 tertiary care hospitals in Malaysia: the 288-bed Mahkota Medical Centre (MMC) in Malacca and the 218-bed Regency Specialist Hospital (RSH) in Johor, contributing to about 95% of the group’s revenue. HMI plans to expand its patient load in MMC by developing the land area of its existing carpark into a new hospital block, increasing its patient beds, wards, and clinics, with a targeted timeline of 3 years.

With RSH at its build-up stage, it is still treading in the loss-making territory. However, the group expects RSH to breakeven by mid-2012 attributing to the addition of specialists and doctors, allowing the hospital to run at full capacity. It is strategically located within Iskandar Malaysia, primed to cater to the premier healthcare market in the region. Once RSH begins running at full throttle, HMI will likely propel into profitability, boosted further by the expansion of patient load in MMC.

HMI has 20 representative offices spanning across the region, mainly in Indonesia. These representative offices operate as referral centres. In a collaboration with the general practitioners (GP) around the area, cases, for example, that are deemed too complex to be handled at the GP clinics will be referred to the representative offices. The referral centres will then provide all-rounded services such as appointment, logistic, and payment transfer for the referred patients to seek treatment at HMI’s hospitals. Part of HMI’s expansion plan is to upgrade these referral centres to generate revenue for the group.

Elevating To The Top Of The Game
In Mar-10, the Singapore Ministry of Health liberalized the usage of Medisave for Singapore residents seeking medical treatment overseas. This elevated HMI’s position in Malaysia’s healthcare industry, as both its hospitals recorded an increase in the number of patients from Singapore.

The group continues to invest in advanced healthcare technology, ensuring its place in the top of the game with the latest equipment and facility. HMI’s emphasis in providing top-notch healthcare services has earned the group its place through the recognition of awards from the Malaysian government agencies. MMC has a track record of prestigious wins such as the Melaka Tourism Award (Health Tourism Category) 2008/2009 from the Malacca Tourism Association and Melaka Tourism Promotion Board, and the Health Industry Recognition Award 2009 from the Malaysian Ministry of Health.

In spite of its excellence in service, a key challenge remains for HMI in getting doctors to fill its patient capacity gap in RSH. Some of its doctors from Singapore see patients in RSH on a visiting basis. Citing high barrier of entry in the healthcare sector due to government regulations, HMI remains conservative with its expansion plans by not committing a high amount of initial investment outlay.

Moving forward, HMI’s performance lies in the time factor of filling up the shortage of qualified medical specialists in RSH and enacting the new medical block in MMC, where it is facing the issue of high demand in healthcare in the region. Another risk factor is the possibility of an economic slowdown, which could reduce the inflow of foreign patients and may also result in local patients seeking cheaper alternative treatments at public hospitals. Rising competition from other healthcare providers for a share in the medical tourism revenue should be placed under close watch.

Key Investment Highlights

HMI’s Fact Sheet

Health Management Int'l  -- -- --   
Business: Healthcare services provider with presence in South East Asia. [FY18 Turnover] Hospitals (81.9%), all other segments (14.7%), healthcare education & training (3.4%).

Insight: May-19, 9M19 revenue rose 8.6% mainly due to highe... Read More


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