Georgia Healthcare Group: Getting back up to speed (upgraded to BUY)
Following the stock’s recent correction (-16% ytd), we upgrade Georgia Healthcare Group (GHG) to BUY, with a 12M price target (PT) of GBp 368/share (from GBp 407/share), offering c.25% upside. Although GHG’s core healthcare earnings disappointed in 2017, primarily on the cost of opening and staffing the newly-opened (e.g., underutilised) units, which we now reflect in our 2018-19E forecasts, we remain positive on GHG’s medium-term earnings prospects. We still see a 2017-20E EBITDA CAGR of 20% (24% before), driven by GHG’s new reference hospitals in the capital, Tbilisi, and, to a lesser extent, polyclinics. We note that the stock has been under pressure since Georgia Capital (GCap) indicated it intends to reduce its stake below 50% (from 57%) by end-2018E. While we reflect this in our GCap forecasts, we do not believe it would sell down at any price, having abundant liquidity to fund its current growth pipeline. Regardless of what transpires, we see the growth profile and current valuation as sufficiently attractive, despite the obvious overhang risk.Georgia Healthcare Group is a holding company. Through its subsidiaries, Co. operates in three segments: Healthcare Services, which is the inpatient and outpatient medical services delivered by the referral hospitals, community hospitals and polyclinics owned by Co. throughout Georgia; Medical Insurance, which comprises medical insurance products, including personal accident insurance, term life insurance products bundled with medical insurance and travel insurance policies, which are provided by Co.'s wholly owned subsidiary Imedi L; and Pharma, which comprises a range of medicines and para-pharmacy products which are provided through a chain of pharmacies by Co.'s subsidiary JSC GEPHA.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.