Ramsay Health Care Limited

Section 1: Company Overview and Fundamentals Insights

1.1 Company Overview

Ramsay Health Care Limited (ASX: RHC) is a healthcare service provider offering a range of acute and primary healthcare services. The group owns and operates private hospitals and day surgery facilities in Australia, the UK, and many other nations.

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

1.3 Top 10 Shareholders: The top 10 shareholders together form ~34.00% of the total shareholding. Paul Ramsay Holdings Pty. Ltd. and State Street Global Advisors Australia Ltd. are holding a maximum stake in the company at ~18.79% and ~3.41%, respectively.

1.4 Key Metrics: The company reported a high gross margin of 72.6% in FY22 compared to the industry median of 43.0%. Further, the asset turnover ratio improved in FY22 to 0.68x compared to 0.66x in FY21. Below is captured the trend of the EBITDA margin and inventory turnover ratio:

Section 2: Business Updates and Financial Highlights

2.1 Business Updates:

2.2 Results Highlights of 1QFY23: During 1QFY23, the company reported total revenue from Asia Pacific region of ~AUD 1,422.5mn compared to ~AUD 1,372.7mn in 1QFY22. Further, the net operating revenue from Ramsay Sime Darby (RSD) segment in 1QFY23 was around 328.4mn vs. 294.4mn in 1QFY22. Similarly, total revenue from the UK also witnessed a growth of around 5.0% QoQ basis.

2.3 Sustainable Growth Commitment: The company’s strategy is to have a meaningful positive impact by deploying its sustainable growth strategy by aiming towards a net zero emission target by 2040.

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 February 8, 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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