Healthcare company Singapore O&G Ltd (SGX: 1D8) produced total returns of around 14% from the beginning of 2019 through to 31 July 2019, coming in as one of the best-performing healthcare stock for the year. The high returns might attract investors here. However, before you invest in Singapore O&G’s shares, you should understand how it brings in the revenue. So, let’s dive right in and find out more about Singapore O&G’s business.
An x-ray of Singapore O&G
The following shows the revenue contribution for each of Singapore O&G’s business segments for the financial year ended 31 December 2018:
|Business segment|| 2018 revenue |
(percentage contribution to total revenue)
|Obstetrics and Gynaecology||S$20.696 million (59.7%)|
|Cancer-related||S$5.311 million (15.3%)|
|Dermatology||S$7.716 million (22.2%)|
|Paediatrics||S$0.958 million (2.8%)|
|Total revenue||S$34.681 million (100%)|
Source: Singapore O&G 2018 annual report
The business segment that raked in the most money in 2018 was obstetrics and gynaecology. This business relates to general obstetrics, labour and delivery, and general gynaecology and surgery. In 2018, the obstetrics and gynaecology segment delivered 1,824 babies, which corresponds to an 8.9% market share for the private healthcare sector in Singapore. Singapore O&G’s market share has been growing steadily from 5.6% in 2014 to the latest figure, which is quite admirable.
Moving on, the cancer-related segment is to do with medical services for gynae-oncology, breast and general surgery. The dermatology segment provides aesthetic dermatological procedures, dermatologic and laser surgery and general skin care.
Lastly, the paediatrics segment, which contributed less than 3% of total revenue, relates to the provision of general paediatrics and adolescent medical services such as immunisation and developmental assessment.
Some of the business segments of Singapore O&G are interlinked. For instance, the paediatrics segment has a direct correlation with that of the obstetrics and gynaecology segment. With an increase in the number of babies delivered by its obstetrics and gynaecology segment, the paediatrics segment’s business would also grow due to the synergy between the two segments.
The Foolish bottom line
Singapore O&G is plugged mostly into the obstetrics and gynaecology healthcare sector here. Even though the number of births in Singapore has been dropping, it’s noteworthy that Singapore O&G has been able to increase its market share in that segment and is bringing in higher revenue to the group.
Now that we have understood how Singapore O&G makes money, investors can look into other aspects of Singapore O&G such as its profitability and future growth prospects before investing in its shares.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of Singapore O&G. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.
Motley Fool Singapore 2019