INVESTORS’ CORNER (ISEC HEALTHCARE, COURTS ASIA, YANGZIJIANG SHIPBUILDING (HLDGS), VALUETRONICS HLDGS

ISEC Healthcare intends to acquire JL Medical, a chain of 4 general practitioner (GP) and aesthetic clinics in Singapore for $13.9m or 12 times P/E. With a 5 year profit guarantee of $1.1m per annum, we raise FY17 and FY18 EPS by 8% and 7% respectively. The deal will be funded 50:50 by cash and new shares, which will be issued at $0.25 per share. The 3 vendors/doctors will sign 5-year service contracts and their shares will be subject to 20% reducing balance moratoriums over 5 years. We have assumed a 4-month impact from JL in FY16 as several conditions have to be met by ISEC for the deal. With JL, ISEC will expand into complementary specialties and this deal is the first of a string of potential upcoming projects, including 3 ophthalmology clinics in Malaysia and an eye hospital in Vietnam. Given that ISEC itself trades at only 20 times P/E we note that the JL deal will be EPS-accretive. Maintain BUY. Maybank Kim Eng (30 May)

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