Why I won’t buy the Fullerton Healthcare IPO

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Apart from the fact that I have no money, that is.

As Asia Pacific grows in both population and wealth, demand for quality healthcare is definitely going to increase. Indeed, optimism for solid growth has driven valuations for other SGX-listed healthcare operators like Raffles Medical Group sky high.

It is in this back drop where news that Fullerton Healthcare IPO was being priced at the bottom of the marketed range was particularly shocking. However, a simple examination of the prospectus highlights that this “bargain buy” is indeed too good to be true.

In the interests of time, I will only be sharing some thoughts on their balance sheet.

Source: Fullerton IPO Prospectus

Initial examination of their balance sheet already throws up some doubts:

1) Total Liabilities grew at an astronomical rate in 2015. More importantly, total liabilities grew much faster than total assets.

2) While Net Assets continued to …

 

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