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Shifa International Hospital (SHFA): Analyst Briefing Key Takeaways

Topline Securities today conducted analyst briefing of Shifa International Hospital (SHFA) where the company discussed its business model and future outlook with investors/analysts.

Today, SHFA is the only healthcare developer in Pakistan and intends to be the region’s leader. The company has 1)the Only Centre in Pakistan with four organ transplant facilities; 2) Highest number of ICU beds in private sector in Pakistan (100+ Critical Beds); 3) State of the Art Diagnostics and 4) 21 State-of-the-art  Operating Rooms.

Following are key takeaways of today’s session:

• In coming year, the company is expecting that the economic conditions will eventually stabilize. Keeping this in mind they are expecting to increase Net Profits as they have increased their In-patient capacity and are introducing new radiology equipment hence increasing their capacity for diagnostics.
• The company is also planning to start construction of their Shifa Day Care Surgery and Diagnostic Center, as well as to start 250 Beds at Shifa International Hospital Faisalabad in the coming year.
• In 3-5 years time, Shifa Day Care Surgery, Diagnostic Center and 250 Beds Shifa International Hospital Faisalabad projects should be completed and the company will benefit from shared costs and bulk purchase from suppliers.
• Pakistan’s first center of Neurosciences ‘Shifa Neurosciences center of excellence’ is expected to be under construction as well within the 3-5 years.
• The overall revenue growth of the Company for 2018 was 11% as compared to corresponding period in previous year. The company’s revenue for the year, from OPD Visits rose by 6%, from IPD visits fell by 2% and from occupied beds increased by 8%. Costs during FY18 mainly rose because the company had to hire professionals 3 months prior to them being able to work at the facilities as they had to be trained.
• The private sector accounts for approximately 80% of all outpatient visits in Pakistan. Pakistan has one of the lowest Nurses and Midwives per 1,000 ratio, at 0.6, and is below Kenya (0.9) and Bhutan (1).
• SHFA has taken following initiatives to promote the health care sector: 1) Shifa has recently signed a management and operating agreement for a 100 bed Shifa City Hospital in Sialkot, 2) Shifa has also signed MOU with Sialkot Chamber of Commerce & Industry to set up a 500 bed Shifa National Hospital in Sialkot, and 3) Shifa has signed an MOU with Defense Housing Authority, Islamabad to build a Shifa Healthcare City on 60 acres of land along with Nileco (proposed partners for project management).
• Shifa H-8 Campus in Islamabad was awarded accreditation by Joint Commission International which is the gold seal in global healthcare service delivery. There are only three hospitals in Pakistan which are JCI accredited and Shifa takes pride in being the only private sector hospital with this gold seal. Shifa has 44 clinical programs along with 20 PG training programs.