Singapore Paincare Holdings Limited (“SPCH”) (SGX:FRQ) made its debut on the Catalist board of the Singapore Stock Exchange on 30 July 2020. With a market capitalisation of around S$38.0 million, SPCH is a medical services group engaged in pain care, primary care and other services. If you are looking at SPCH with interest, here are 7 things to know before you invest.  

1. Company profile 

SPCH was founded in 2007, and is one of the first clinics in Singapore specializing in the treatment of persistent pain. The pain care services provided by the group include, among others, minimally invasive procedures, cancer pain treatment, specialized injections, pharmacotherapy, and cognitive behavioural therapy. The group also provides general medical consultations, management of chronic and acute conditions, and dermatology services.   

SPCH operates two specialist clinics and four medical clinics. Through its associated company, the group also operates an additional medical clinic and two health screening facilities. The specialist clinics are located centrally while the medical clinics and health screening facilities are located in both central and residential areas of Singapore. Through the relevant medical clinics, the group expects to be able to treat a majority of its patients seeking pain care services through specialized injections and pharmacotherapy. The specialist clinics take care of patients who require further treatment for their pain-related ailments.  

(Source: Company Factsheet)

2.  Business overview

SPCH provides the following services:

  • Pain care services. The group provides specialized treatment of pain conditions occurring anywhere in the body such as acute pain from injury, chronic back and neck pain, post-surgical pain, as well as cancer pain. Its pain care services include, among others, minimally invasive procedures, cancer pain treatment, specialized injections, pharmacotherapy, and cognitive behavioural therapy.

    The conditions which its patients suffer from include degenerative pain conditions (e.g. slipped discs, bone spurs, and knee arthritis), acute post traumatic injury (e.g. muscle and tendon sprains, ligamental and tendon tears, and spinal fractures), and idiopacthic functional pain conditions (e.g. irritable bowel and/or bladder syndrome, fibromyalgia, post-stroke pain, and post-nerve injury pain).

    Patients who seek its pain care services are primarily from Singapore as well as the ASEAN region such as Indonesia, Vietnam and Malaysia, and globally from countries such as Australia and the United Arab Emirates. 
  • Primary care and other services. SPCH provides general medical consultations, management of chronic and acute conditions, and dermatology services. Through its associated company, it also provides health screening services.

    Patients who visit the SPCH Medical Clinics may be walk-in patients, employees of corporations, or policyholders of insurance companies with whom it has entered into arrangements to provide healthcare services. 

3. Business strategy and future plans

SPCH’s business strategies and future plans are to:

  1. Expand the range of pain care services which it provides to become a one-stop centre for pain care treatment

The group may expand its services to provide pain treatments which are alternatives to western medicines such as Traditional Chinese Medicine (TCM), as well as other non-medical services such as physiotherapy and rehabilitation services. The group may also provide pain education services such as pain accreditation training workshops to other medical practitioners outside the group.  

  1. Expand its business operations locally and regionally

SPCH intends to expand its present business operations organically or inorganically. In particular, the group intends to acquire new pain specialist clinics and/or clinics in other residential areas in Singapore (where it does not already have a presence) to increase the accessibility of pain care treatment for pain suffers and to increase the stream of patient base through referrals from primary care physicians. 

Furthermore, the group’s vision is to be the leading provider of interventional pain procedures in Asia in terms of both specialist and primary care. Hence, it may expand abroad through franchising, joint ventures, acquisitions or strategic alliances. 

  1. Grow the group’s patient base

SPCH intends to diversify its patient base to include more corporate clients. It plans to target corporate clients by, among others, holding seminars and talks to increase awareness of the medical conditions treated and services provided by the group. 

4. Use of proceeds

SPCH intends to use the estimated net proceeds raised of approximately of S$5.3 million as follows: 

  • Expand range of pain care services (S$1.1 million or 20.6%)
  • Expand its business operations locally and regionally (S$1.4 million or 26.3%)
  • Working capital (S$1.0 million or 19.5%)
  • Listing expenses (S$1.8 million or 33.6%)

5. Industry prospects  

SPCH believes the long-term healthcare trends are favourable to its business. 

  1. Rising income and educational levels

Singapore has been experiencing rising income levels, with gross national income per capita (at current market prices) increasing from S$80,705 in 2018 to $80,778 in 2019, along with median monthly household income of S$9,293 in 2018 to S$9,425 in 2019. The rising affluence in Singapore increases the affordability of private healthcare services. Together with higher educational standards, this may increase awareness of, and drive the demand for, high quality and comprehensive medical services. 

  1. Increasing ageing population and chronic disease prevalence

In 2017, people in Singapore had a life expectancy at birth of 84.8 years and healthy life expectancy of 74.2 years. As Singapore’s population ages, it is expected that there could be a corresponding increase in chronic ailments for which pain may be a symptom. For instance, approximately 85.0% of the global population suffered from both body and head pain in their lifetime. 

Further, based on “Pain Prevalence in Singapore” published in the Annals Academy of Medicine Singapore in November 2009, (i) 8.7% of all adult Singaporeans suffer from chronic pain (defined as pain persisting at least three months in a six-months duration), of which an average of 19.7% of them are older patients (age more than 65 years old), and (ii) prevalence of chronic pain in Singapore will increase significantly with an ageing population. The most common chronic pain symptoms being knee, leg and back pain. 

  1. Increasing ageing population and chronic disease prevalence

Singapore is a regional medical hub which has been attracting an increasing number of foreign patients. With a world ranking of the fourth position in the Medical Tourism Index, as at 2014, approximately 550,000 overseas patients visit Singapore to seek medical treatment. Of note, foreign patients seeking pain care services at SPCH specialist clinics accounted for approximately 15.9% of its revenue for HY2020.  

6. Management and substantial shareholders 

Subsequent to the listing, SPCH’s two largest shareholders are Dr. Bernard Lee and Dr. Jeffrey Loh at equity stakes of 30.0% and 17.1% respectively. 

Dr. Bernard Lee is SPCH’s Executive Director and Chief Executive Officer. He is the group’s pain care specialist and is responsible for the overall management, strategic planning and business development of the group. He started his private practice, through Singapore Paincare Center in 2007. Prior to setting up his private practice, Dr. Bernard Lee established the Pain Clinic in Tan Tock Seng Hospital in 2002, and was appointed as a director of the pain management unit under the Department of Anesthesia at Tan Tock Seng Hospital from 2002 to 2006. Dr. Bernard Lee was also instrumental in establishing the Women’s Pain Centre at KK Women’s and Children’s Hospital in 2009 where he held the position of director of the Women’s Pain Centre between 2009 to 2018. Dr. Bernard Lee had also contributed to the education sector, where he was a clinical lecturer at the National University of Singapore from 2011 to 2017, and an associate professor lecturer at the Faculty of Medicine and Surgery at the University of Santo Tomas, Philippines from 2011 to 2018.  

On the other hand, Dr. Jeffrey Loh is SPCH’s Executive Director and Chief Operating Officer on 5 July 2019. He is responsible for the overall business operations of the group. Dr. Jeffrey Loh has 19 years of experience in the medical field. Between 2001 to 2007, Dr. Jeffrey Loh worked as a house officer and medical officer in various hospital departments within the National Healthcare Group, namely the departments of respiratory medicine, obstetrics and gynecology, orthopedics, Accident & Emergency, and neurosurgery. In particular, during the SARS outbreak in Singapore in 2003, Dr. Jeffrey Loh was actively engaged in running the SARS Intensive Care Unit at Tan Tock Seng Hospital. He joined Lian Clinic as a primary care physician in 2006. He was accredited as a Family Physician by the Singapore Medical Council (SMC) in 2012. Dr. Jeffrey Loh is also presently a Designated Workplace Doctor by the Ministry of Manpower. 

7. Current valuation

With a closing share price of S$0.22 as at 25 February 2021, SPCH is trading at a price to earnings (PE) ratio of 18.5, with an indicative dividend yield of 3.26%. SPCH has mentioned in its IPO prospectus that directors intend to recommend and distribute at least 70.0% of its net profit after tax attributable to owners of the company (excluding the share of results of associates) for each of FY2020, FY2021 and FY2022. 

Investors should be mindful that pain care treatment is yet to be widely recognized as an established medical specialty in Singapore. Moreover, SPCH’s current scale and small size means that there are significant key-man risks as the group is highly dependent on Executive Directors, Dr. Bernard Lee and Dr. Jeffrey Loh to manage and drive the business. Hence, given the group’s lack of operating history as an integrated medical services group, investors should wait and monitor the company for some time before considering an investment. 

(Source: Google Finance)

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