SOG: Winning market share for 5th consecutive year

SOG’s cancer and O&G doctors gained recognition and won market share in 2018.

SOG is one of my favourite medical stocks on the SGX. Their share of the private birth market grew for the fifth consecutive year. Based on their 2018 annual report, SOG specialists delivered 1,824 babies in 2018 which works out to a 8.9% market share of the private birth market.

1,824 babies in 2018.

Let that sink in for a while.

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1,824 babies in 2018

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That  works out to almost 5 babies a day!

It’s pretty impressive because the company’s obstetrician headcount remained the same in 2018 so each of the doctors are now delivering more babies and gaining recognition.

SOG market share

Babies per doctorSimilar story for the group’s cancer specialists as well. Headcount remained the same at 3 doctors but surgery load per doctor has reached a record high.

Cancer surgery per doctor

Growing contributions is crucial for several reasons. First, the company’s cancer specialists are younger doctors so their growing earnings would reduce dependence on the group’s founding doctors. Second, growing surgery load in the cancer segment suggests that the cancer segment is reaping some synergies from O&G referrals. The strategy is working! Lastly, growing earnings from the cancer segment is more sustainable because it is less dependent on medical tourism trends.

After reading the 2018 annual report, I’m a lot more comfortable with my stake in the company.  Trailing dividend yield is 4.4% which is decent for a net cash medical services company.  I am attending the AGM on 26 April. Feel free to email me or contact me on Investing Note if you want me to ask questions.

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