Econ Healthcare seeks Catalist listing, again

FORMER Catalist-listed private nursing home operator Econ Healthcare is looking to list on the Catalist board of the Singapore Exchange again.

On Thursday, it lodged its preliminary prospectus - without pricing information - sharing its organic and inorganic expansion plans, such as by by merger and acquisitions as well as the upgrading of existing facilities.

Econ Healthcare has two business segments - medicare centres and nursing homes; as well as other operations and ancillary services such as providing healthcare training services, offering traditional Chinese medicine services at its clinics, and operating senior activity centres in Singapore.

The group currently operates 10 medicare centres and nursing homes in Singapore and Malaysia with a total bed capacity of 1,376. It has also been appointed as an operator for two upcoming nursing homes in Singapore - Econ Medicare Centre and Nursing Home - Henderson, expected to be operational in H2 2022, and Econ Medicare Centre and Nursing Home - Jurong East, expected to be operational in 2025.

These two facilities are expected to have an indicative bed capacity of up to 236 and 732 beds, respectively, bringing the estimated total bed capacity to 2,388 by 2025.

According to Euromonitor, it is the largest private nursing home operator by revenue receipts in 2019 in Singapore and Malaysia, with a market share of 27 per cent and 43 per cent, respectively.

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Econ Healthcare has also expanded into China with the establishment of Chongqing Nursing Home, which is expected to start operating this year.

However, the group's top and bottom line have been on a gradual decline from FY18 to FY20. Its fiscal year ends in March.

For the first six months of FY21, it generated a revenue of S$10.2 million, down from S$11.1 million in the corresponding year-ago period due to fewer private residents. There was a slight increase in operating subvention grants from S$7.5 million in H1 FY20 to S$8.4 million in H1 FY21, due to the increase in number of beds occupied by subsidised residents partly because of the Covid-19 impact on hospital resources.

First-half FY21 net profit more than doubled to S$3.7 million, from S$1.5 million a year ago, but excluding exceptional grants, it would have been S$1.9 million.

Econ Healthcare was privatised in 2012 by founder Ong Chu Poh and European private equity fund group EQT, with its low trading liquidity cited as a reason. In 2016, it was reported that Mr Ong bought back all the shares of the firm for an undisclosed amount. Mr Ong is still executive chairman and group CEO of the firm.

DBS Bank is the sponsor, issue manager, underwriter and placement agent.