This healthcare provider is in an acquisitive mode, and operating in a fragmented, but quickly-expanding marketplace.
iKang Healthcare Group (KANG)
from The Oberweis Report
Headquartered in Beijing, China, iKang Healthcare Group (KANG) is the largest private provider of medical checkups in China. In China, the market for annual physicals is still in its infancy but growing rapidly, driven by increased health awareness, government policy, and rising disposable income. iKang competes with public hospitals through advantageous pricing and better tailored services.
The market for preventative medicine is fragmented, with Frost and Sullivan ranking iKang as the market leader with just 13.6% market share. With an established national network of exam centers and a recognizable brand name, iKang is positioned to be the consolidator.
In 2014, the firm serviced 3.6 million people and counts 81 of the 100 largest companies in China as clients. iKang operates 70 centers in 18 cities and is planning to add 10-15 new centers annually over the next few years. Over time, expect to see iKang expand its offerings in tier-2 and tier-3 cities, and cross-sell other offerings including disease screening and dental services.
In the company’s latest reported fourth quarter, net revenues increased approximately 43% to $42.4 million from $29.5 million in the fourth quarter of last year. iKang reported a loss in the latest quarter, but for the just completed fiscal year reported earnings (per ADS) of $.41 versus a loss in the prior year. We expect significant growth in the year ahead, with earnings growing to $.80.
Jim Oberweis, CFA, The Oberweis Report, www.oberweisreport.com, 800-323-6166, August 2015