Medicover: private healthcare pioneer keeps on rolling (BUY - initiation of coverage)
We initiate coverage of Medicover with a BUY rating and a price target (PT) of SEK 238/share. Medicover provides healthcare and diagnostic services across several European markets - mainly Poland, Germany and Romania - as well as India. It offers a well-tested proposition: healthcare services and facilities that are “a cut above” those offered by the State systems, at prices accessible to the middle classes. The business generated a 2019-23 revenues CAGR of 20%; excluding acquisitions, the top line still grew by an 18.5% CAGR, we calculate. For 2023-26E, we assume a top-line CAGR of 16% and an adjusted EBITDA CAGR of 18.2%, driven by healthcare services. Also, because Medicover’s EBITDA is dominated by the depreciation component, we expect a huge recovery in the EBIT and net profit, i.e., 2023-26E CAGRs of 39% and 70%, respectively.Medicover AB is a Sweden-based healthcare and diagnostic services provider. It offers a broad range of healthcare services and hub-and-spoke diagnostic laboratory network, supported by proprietary software and information systems infrastructure. The Company offers its services through two divisions: Healthcare Services and Diagnostic Services. The Healthcare Services division offers services ranging from primary care to specialist outpatient and inpatient care. The care is delivered mainly through Medicover's own network of clinics and medical facilities. The Diagnostic Services division offers a broad range of diagnostic laboratory testing for humans and some veterinary services across all main clinical pathology specialties. The Company focuses primarily on such markets, as Poland, Germany, Romania, Ukraine.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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