Haitong International initiates equity research report coverage on EC Healthcare with a BUY rating

March 7, 2022

Haitong International covers EC Healthcare for the first time with a BUY rating and a target price of HK $12.53.

The main viewpoints of the paper are as follows:

01 Hong Kong’s leading comprehensive medical service provider and market consolidator

EC Healthcare is a leading comprehensive healthcare service provider and market consolidator in Hong Kong. FY2013-2021 revenue increased from HK$230 million to HK$2.08 billion with a CAGR of 31.7%; In recent years, the overall expense ratio has remained stable while the profit margin has fallen slightly.

02 Competitive advantages

  1. Digital Supremacy: The company has fully realized digital operations to support various medical service projects. The data center will further empower the four aspects to fuel growth: new store openings, acquisition and integration of new brands, brand cultivation and marketing.
  2. Platform Supremacy: The medical market in Hong Kong is highly fragmented and often operates at subpar efficiency. The company, through commercialization efforts, provides a mutually beneficial platform for doctor-partners to excel in their practice while achieving superior operating leverage.
  3. Channel Supremacy: The company cultivates a KOL team with full coverage on social media to penetrate multiple channels. Through its ecosystem and omnichannel marketing, the company can capture market shares and retain customers at significant scale effects.

03 Looking to the Future

The company is deeply engaged in the Greater Bay Area. It is expected to achieve sales of HK$6 billion in FY2025 through organic growth and mergers and acquisitions.