Hi @madamswer, would you mind sharing your workings on how you...

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jiantan86

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11/09/17

22:39

Post #: 27142077
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Originally posted by madamswer ↑

"What multiple do we think would be appropriate given the 12 month forecast is for hospital EBITDA broadly similar?"

That is a great question, @dinero,

I have just come off listening to the conference call and, notwithstanding management's rather poor articulation of the reasons why HSO's Hospitals are delivering zero growth despite all the capital that is being invested, I still see this as being a premium-to-market quality business (albeit that it is now heavily geared... which renders P/E multiples somewhat meaningless).

Therefore, on an EV/EBITDA basis, I think 10 times is an appropriate, fair-value multiple for HSO at this point in its corporate evolution. By comparison, RHC currently trades at around 12x EV/EBITDA, and it is the superior, more advanced, industry operator with the longer track record of success, as well as the international growth legs (for better of worse).

And 10x EV/EBITDA corresponds to a share price of around $1.60, I'm afraid.

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Hi @madamswer, would you mind sharing your workings on how you calculated the 10x EV/EBITDA to correspond to a share price of $1.60? I've been working through some calculations based on the latest annual report but am only getting 12x EV/EBITDA based on the current share price of $1.65.

I used the following:
Share price: $1.65
Number of shares: 1,740.9m
Debt: $2,333.3m
Cash: $195.9m
EBITDA: $411.4m.

Thanking you in advance.

HSO Price at posting: $1.65 Sentiment: None Disclosure: Not Held
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Hi @madamswer, would you mind sharing your workings on how you...

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