JT 8.2016This article, written by Jennifer Tan (left, Director, Research & Products,  Equities & Fixed Income, at the Singapore Exchange), originally was published in SGX's kopi-C: the Company brew series on 30 September 2015. The article is republished with permission.



Singapore O&G CEO, Dr Victor Ng 
(Photo: Company)

Dr Victor Ng, the Chief Executive Officer of specialist medical group Singapore O&G, finds it easier to interpret a company’s profit and loss statement than an X-ray.

Ng holds degrees in Medicine and Pharmacology from the University of Dundee in Scotland. He started his traineeship in Obstetrics and Gynaecology in Scotland and later, in Singapore’s National University Hospital, before pursuing a career in family medicine.

LQM ad141eI enjoy trying new things, so I joined the financial sector. Although I was unhappy during those two years because of my lack of training, and the philosophy and thinking inherent in these financial institutions, I gained invaluable knowledge and experience that prepared me for what I am doing now.

- Dr Victor Ng
CEO

Singapore O&G

“As a GP, I don’t get to see that many X-rays. But my leisure reading during my traineeship consisted of books on charting, momentum trading and fundamental analysis, rather than fiction,” said the soft-spoken 55-year-old.

“I was interested in investing, and I wanted to get it right after making some very bad calls. So I needed to do my own research, to study the financials of a company and make sense of it.”

Ng left his successful General Practitioner practice after nine years to join the financial industry in 1997, focusing on stockbroking and investments, before returning to the healthcare industry two years later.

“I enjoy trying new things, so I joined the financial sector. Although I was unhappy during those two years because of my lack of training, and the philosophy and thinking inherent in these financial institutions, I gained invaluable knowledge and experience that prepared me for what I am doing now,” he recalled.


Happy Outcome

Thereafter, Ng was involved in various opportunities, ranging from producing a lifestyle magazine for doctors, to running a medical marketing company, serving as an advisor to a medical tourism business, and managing a group of established surgeons with various specialties.

In late 2010, he hatched a proposal to form a medical company specialising in healthcare for women, and after partnering with two gynaecologists – Dr Lee Keen Whye and Dr Heng Tung Lan – set up Singapore O&G in January 2011. The company was successfully listed on the Catalist Board in June.

“You may ask why Obstetrics and Gynaecology? That’s because it deals with a happy outcome. It also has a 50:50 mix of surgery and medicine, and not many specialties have that kind of an equal breakdown,” Ng added.

 

LQM 993300

The government is basically doing the marketing for us. And in the best of times, or the worst of times, the total fertility rate is fairly stable. This means SO&G’s business is stable.

 

- Dr Victor Ng
CEO

Singapore O&G

The youngest in a family of four sisters and four brothers, Ng believes he was the result of an accidental conception.

“I was definitely an accident, being the last one. And my parents finally got it right, after so much trial and error,” he said, tongue firmly in cheek.

Other benefits of being the youngest include getting the best portions of food at family meal times, and occasional pampering by older siblings. One downside is that no one listens to the baby in the family, even if he is the CEO of a listed company.

“My siblings are ruled by whose voice is the loudest in the family, and I do not shout. Even now, I still do not have much say during arguments,” the father of a son, 26, and a daughter, 24, said with a grin.

Consumed by wanderlust, Ng spends his holidays traipsing around Europe and Asia, occasionally with his daughter in tow.

♦  Making a Difference

While he may not always call the shots at home, he certainly does at work. He is obsessive about patient care and attentive to detail.

“We want to make sure we’re very good at what we do. Doctors must be passionate about their patients,” he said. “While we cannot be everything to everyone, we need to be something to someone such that we can make a difference in their lives.”

He is also focused on grooming the operational and administrative staff in SO&G – the majority of whom are below the age of 36. “I want them to grow with the company.”

While Ng might have been responsible for the conception of SO&G, the company will always be the baby of every employee in the organisation, he said.

Singapore O&G

Stock Price

S$1.145

Market Cap

S$276.6m

52-week High Low

68.5c-$1.245

Dividend Yield

2.3%

PE

33.6x

Source: SGX StockFacts
(data as of 9 Dec 2016)

“It’s everyone’s duty to ensure it achieves its vision and mission.”

Ng wants to nurture SO&G into a sturdy entity, just like a rain tree with its solid trunk, roots and branches. “Very seldom do you see rain trees uprooted in a storm,” he added.

To achieve this, he is setting up four cornerstones to secure the company’s revenue streams over the next three to five years.

Apart from basic OBGYN services, SO&G has branched out into cancer treatments by taking on two surgical oncologists for breast and gynaecological cancers. It also plans to expand into paediatrics and aesthetics.

“In 2014, we had a five to six per cent share of the private delivery market. With increased baby deliveries, it does not make sense to leave paediatrics out of the equation,” he pointed out.

“We are also looking for an IVF specialist – that is one sub-specialty which would allow us to provide a full complementary suite of services for women’s healthcare needs” he added, referring to the in vitro fertilisation process used by infertile couples.


“Prime” Segment


Although the healthcare industry is relatively defensive and fairly recession-proof, challenges abound due to competition and the persistent shortage of qualified manpower, including nurses.

“There will always be competition from restructured hospitals. We need to remain competitive, but we compete on outcome and service, not necessarily on price,” Ng said.

And being in the enterprise of pregnancy and childbirth, SO&G is in a “prime area”, given the Singapore government’s attempts to lift the city-state’s total fertility rate (TFR) through its Baby Bonus scheme.

GynaecologistSingapore O&G is a specialist provider of obstetrics & gynaecology, gynae-oncology, breast and general surgical care and dermatology services. (Photo: Company)
Singapore’s TFR stands at 1.25 as of last year, well below the replacement level of 2.1 children per woman.

“The government is basically doing the marketing for us. And in the best of times, or the worst of times, the TFR is fairly stable. This means SO&G’s business is stable,” he beamed.

Beyond the city-state, SO&G hopes to share expertise and collaborate with private and government entities in neighbouring countries like Cambodia to reduce infant and maternal mortality rates.

“Our neighbours are not experiencing the same quality of healthcare that we take for granted in Singapore. Regional infant mortality rates range from 10 to 20 per 1,000 live births, compared to Singapore’s one to three,” Ng said.

To build a regional footprint, the company is also exploring partnerships in China, and possibly opening up clinics in Myanmar and Vietnam.

Ng, who played hockey with a zest until his knees gave out, believes in investing time and effort to shape SO&G’s future.

“I believe that in everything we do, we must not give up too easily. If something is worth pursuing, we should pursue it with determination, despite all the hurdles we face.”



Financial results

Year ended 31 Dec
(S$ m)
FY2015 FY2014 FY2013 FY2012
Revenue 16.4 13.5 8.6 8.1
Profit from operations 6.1 5.0 3.7 3.4
Net profit 5.3 4.2 3.1 3.0
Net profit margin 32.3% 31.4% 36.1% 37.0%

 

Half year ended 30 Jun
(S$ m)
1H2016 1H2015 YoY Change
Revenue 13.9 7.7 80.5%
Profit from operations 6.2 3.2 91.0%
Net profit 5.2 2.7 90.7%
Net profit margin 37.4% 35.0% 2.4ppt

Source: Company data




Outlook
  • RQM 993300Demand for good antenatal and gynaecological treatments remain strong; SO&G is also seeking to increase market share by offering more value-added packages aimed at both local residents and medical tourists
  • SO&G is well-positioned to provide affordable and effective treatment for both breast and gynaecological cancers, given the rising incidence of cancer in Singapore.
  • The company remains positive about FY2015, and barring any unforeseen circumstances, it will continue to be profitable for the second half of the year.
  • Barring any unforeseen circumstances, the final dividend should be larger than the interim dividend of 0.88 Singapore cents a share in FY2015.


Singapore O&G Ltd

Singapore O&G operates as a specialist medical and surgical company with a focus in obstetrics and gynecology. It manages eight clinics including two in Parkway East Medical Centre, three in Gleneagles Medical Centre, one in Thomson Medical Centre, one in Mount Elizabeth Novena Specialist Centre, and one at Cassia Crescent. Singapore O&G was founded in 2011 and is based in Singapore.

The company website is: www.sog.com.sg

Click here for the company's StockFacts page.


For its half year results ended 30 June 2016, click here.


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