AsiaMedic Limited Has Surged By 108% this Week To Be A Huge Winner In Singapore: What Happened?

Shares of AsiaMedic Limited (SGX: 505), a private healthcare provider, had ballooned by more than 100% from last Friday’s close at S$0.066 to end this week at S$0.137.

With such a strong gain, and the fact that Singapore’s market barometer the Straits Times Index  (SGX: ^STI) had clocked a slight loss over the same period, AsiaMedic is clearly a big winner in Singapore’s share market this week.

On 2 June 2015, the firm announced that two of its shareholders, Grandiflora Pte Ltd and Tan Wang Cheow, have agreed to sell all their shares in the company to Luye Medicals Group Pte Ltd. Grandiflora and Tan will offload their collective 28.2% stake in the firm at S$0.18 apiece. The sale was completed on 3 June 2015; prior to the deal, AsiaMedic’s shares were trading at S$0.067 each.

Grandiflora is an entity partly owned by Anthoni Salim, the third richest man in Indonesia, while Tan is the Non-Executive Chairman of AsiaMedic. Following the sale, Tan ceased to be a director of the healthcare provider while Grandiflora’s nominees to the firm’s Board of Directors, Andi Solaiman and Suzanne Liau, had stepped down too.

In conjunction with its purchase of AsiaMedic’s shares, Luye Medicals had also nominated three of its own candidates – Dr Hong Hai (as Independent Director), Tan Soo Kiat (as Non-Executive Director) and Koh Boon How (as an alternate to Tan Soo Kiat) – to join the healthcare provider’s Board of Directors. Asia Medic’s Nominating Committee and the Board had approved the new appointments, which came into effect on 3 June 2015.

For the financial year ended 31 December 2014, AsiaMedic had experienced a 28% increase in revenue to S$18.8 million on the back of a better performance from its core business of diagnostic imaging and wellness services as compared to a year ago.

AsiaMedic’s bottom-line had displayed even stronger growth; for the year, the healthcare provider’s profit had spiked by more than ten-fold from S$53,946 in 2013 to S$669,911 mainly as a result of a 599% increase in its Other Income to S$1.2 million. The growth in Other Income in turn had been due to a “gain on disposal of equipment, payouts received from the Productivity and Innovation Credit and Wage Credit Schemes, fair value gains on contingent consideration and put options granted to non-controlling interests, and grants received during the year”.

AsiaMedic is now trading at nearly 70 times its historical earnings.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.