Thomson Medical’s ‘young-blood’ duo set to pump up firm’s expansion game

THOMSON Medical Group (TMG) appears to have a “hungry” young-blood duo who are relishing the chance to shake things up at the private healthcare services provider for women and children. First on the to-go list is the company’s thus-far “conservative approach” under the previous team, which they opine has unwittingly limited the Singapore-listed firm’s reach beyond Singapore and Malaysia - its current markets.

“We feel strongly about that. We don’t want to be complacent about our current positioning... and want to see ourselves basically as a platform for South-east Asia; to carry this hunger and this drive to look at us as an untapped platform as opposed to a big hospital, which can only grow incrementally,” says Kiat Lim, TMG’s executive vice-chairman for six months so far.

Lim, son of Singapore billionaire Peter Lim - the company’s majority owner - has been on TMG’s board since 2019.

“We are a platform from Singapore and Malaysia that is ripe for export and growth and are going to embark on a journey to build out this regional platform across borders, leveraging and tapping into our brand value. We are only just getting started,” notes Lim, 29, in an interview with The Business Times.

Lim has a penchant for deal-making, honed by his early years at his father’s firm Kestrel Capital, where he drove various investments and corporate finance deals. Melvin Heng, who was appointed TMG’s chief executive last December, brings with him operational acumen in the healthcare space; the 39-year-old physician was previously Gleneagles Hospital CEO.

“I am willing to give a good part of the best years of my life to see this happen. It’s exciting times and this (Thomson) is a great platform,” says Dr Heng. Evidently, TMG’s South-east Asian aspirations have sent some pockets of investors giddy with anticipation. Early this month, the stock jumped by some 25 per cent in the ensuing two days after the firm announced that it was evaluating and pursuing acquisitions or collaborations to grow its “pan-Asian footprint”. The counter drew the sharpest uptick in two years following the news.

For now, the firm is looking for the “right partners” who are willing to “deploy capital” to build the “platforms”.

“We have to be very opportunistic and don’t want to wait too long. We don’t want to sit and think about it for half a year. But in order to do this, we have to remain fluid,” says Lim, in response to questions on who the firm was keen to tie up with as it scours investment opportunities in the region.

Dr Heng adds: “It’s not just about buying (an asset) but being thoughtful about creating value... making one plus one into more than two. If you buy two hospitals, it doesn’t make sense. But if you buy a hospital and a fertility centre or even, consumables, or pharmaceuticals - these are things that are more value accretive... (as) we are building an eco-system.”

The healthcare firm recently reported an 83 per cent jump in net profit to S$23 million on the back of a 27 per cent improvement in revenue to S$184 million for the six months ended December 2022.

In FY2022 ended June, net profit quadrupled to S$54 million on the back of a 39 per cent jump in revenue to S$334 million, owing to a recovery in patient load post-pandemic, management of vaccination centres and opening of a new wing in its flagship hospital in Malaysia.

Singapore, where it owns and operates Thomson Medical Centre and a network of specialist medical clinics and facilities providing outpatient women and children healthcare services among others, contributed more than three-fourth of the group’s revenue. The rest stemmed from Malaysia, where it owns a majority stake in Malaysian-listed TMC Life Sciences - a multi-disciplinary healthcare firm - and Thomson Hospital Kota Damansara.

The thrust of TMG’s expansion is likely to centre around women and children, albeit beyond those in some respect.

“There are a lot of general hospitals out there and we don’t want to be another one that gets lost in that bucket. Our roots are women and children and we are building a platform with this core theme. Having this edge is not limiting but is actually a unique selling point. There’s a massive untapped potential within these different verticals in healthcare,” Lim elaborates.

For example, Dr Heng says beyond meeting maternity healthcare needs, there is also a demand for cochlear implants or cardiothoracic surgery for children or breast cancer surgery for women, among others. “So, we can’t deny that in order to serve our clientele better, we need to build all the systems that a general hospital would have, yet we wouldn’t want to wade into saying that we are another general hospital group. This gives us that discipline to be more focused on how to create more cohesiveness.”

For starters, “hot markets” like Vietnam and Indonesia are on TMG’s expansion crosshair - a logical strategy considering Singapore is a healthcare destination for residents there. “But we are also looking at Cambodia, the Philippines and so on.... that’s kind of where we are playing at,” Dr Heng is quick to add.

A rising working population, growing affluence and bursting demand for private healthcare services plus a gap in such provisions make these markets in South-east Asia a key target for any company looking to grow its regional footprint.

Lim says: “A Singapore brand (in these markets) would make quite a lot of sense. While going into it ourselves is definitely a possibility, we also want to embrace - and this is a little bit top-down culture - more of a collaborative and open ecosystem. We want to work with partners, and new people. We haven’t really been playing with others that much. It’s time we changed this.”

For astute watchers of players in Singapore’s healthcare space, the multiple shufflings and changes at TMG’s board and top management in the past year or so, which have culminated in both men’s appointments to the helm of the group, must not have gone unnoticed.

Lim explains these changes are in line with the group’s new strategy moving forward. “The real value of the group lies in the brand and exporting it outwards of Singapore. We are really gearing ourselves for 5... 10 or even, 15 years of transformational growth and we want senior leaders to see it through together all the way.”