Australian & Global Private Hospitals: Strike While The Iron Is Hot

Our 32-page report on the international private hospital sector suggests that the industry is well placed to benefit from the impact of global environmental factors. We believe that these include:

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i)  Historically low-interest rates – which support growth option valuations;

ii)  Aging of developed market/affluent populations;

iii)  Increasing wealth disparity across both developed and developing markets that may contribute to increasing rates of mental illness;

iv)  Industry structural and operating model change (e.g. vertical integration and capitation); and

v)  Technology based operating efficiencies and improvements to service quality and consistency.–

We consider that it may be time for Australian operators to strike while the iron is hot and undertake expansion into geographies outside of Australia. Our view is based on factors such as:

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i)  The expansion of Australia’s free trade agreements;

ii)  Attractive valuation disparities;

iii)  A history of strong execution by Australian operators; and

iv)  Globally prevalent governmental fiscal pressures.

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Our analysis incorporates the implications of the above factors from the perspective of Australian and internationally listed hospital stocks. The report outlines where we consider that value may be captured by investors.

If you are an institutional or sophisticated investor, please contact us for more information or a copy of this report at info@longlake.com.au