Healius Limited

Section 1: Company Overview and Fundamentals Insights

1.1 Company Overview

Healius Limited (ASX: HLS) is a healthcare company offering medical and health-related services and healthcare technology solutions to medical and allied health professionals.

1.2 The Key Positives, Negatives, Investment Highlights, and Risks

1.3 Top 10 Shareholders: The top 10 shareholders together form ~56.16% of the total shareholding. Perpetual Investment Management Limited and Australian Retirement Trust are holding a maximum stake in the company at ~10.42% and ~8.46%, respectively.

1.4 Key Metrics: The company reported a high net margin of 12.6% in FY22 compared to the industry median of 5.4%. Further, the asset turnover ratio improved in FY22 to 0.59x compared to 0.45x in FY21. Below is captured the trend of the EBITDA margin and return on equity:

Section 2: Business Updates and Financial Highlights

2.1 Business Updates:

2.2 Results Highlights of FY22: During FY22, the company reported receipts from customers of around AUD 2,456.2mn compared to AUD 2,129.6mn in FY21, driven by growing customers' healthcare choices and treatment innovation.

2.3 Trading Update: Although the company reported growth in revenue BAU, some headwinds can affect the healthcare industry, such as staffing shortages, the decline in COVID-19 testing compared to regular testing during the pandemic breakout and an increase in the medical benefits system.

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary

4.1 Price Performance and Technical Summary

4.2 Fundamental Valuation

Valuation Methodology: P/E Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is January 18, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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