Celebrating World Health Day – Shining the Spotlight on 2 Healthcare Related Stocks

MJ 1200x628 - WHD

Jeremy Chua, Dealing 

Jeremy graduated from Nanyang Technological University with a Bachelor’s Degree in Business and is a member of the largest dealing team in Phillip Securities. He strongly believes in the importance of staying invested in the financial markets and evaluates stocks using fundamentals to make informed investment decisions.

In his free time, he enjoys researching on market events and disruptive investment themes to generate new investment ideas for the short and long term.

Chua Minghan, Assistant Manager, Dealing

Chua Minghan graduated from the National University of Singapore with a Bachelor’s degree in Economics. He is passionate about education and went on to get a post-grad Diploma in teaching. His vision is to educate clients to make informed decisions for their trading and investments.

Minghan enjoys learning fundamental analysis, technical analysis, and strives to use data analysis to improve his trading skills.

World Health Day

World Health Day is celebrated annually with a specific health theme highlighted by the World Health Organization (WHO).

The principle behind this initiative by WHO is to raise awareness about the overall health and well-being of people across the world.

The theme this year is to keep our planet and humans healthy, and foster a society focused on well-being. [1]

So, can investors find stocks in Singapore that contribute to our well-being?

The answer is Yes.

And most of us are probably already using these companies’ services and products. So why not consider investing in them?

Great Eastern (SGX: G07)

Great Eastern provides insurance services in 3 segments: Life insurance, Non-life insurance, and shareholders.

The life insurance segment includes life insurance, long-term health and accident insurance, annuity, and investment-linked policies.

The non-life insurance segment includes short-term property and casualty insurance, and short term medical and personal accident insurance. [2]

The shareholder segment provides fund management services.

If you have any insurance from this company, you are contributing to their business revenue and should look at how they are doing if you want to invest in them.

Great Eastern Financial Data

For a start, let’s look at the top line of the company. In other words, the revenue Great Eastern is bringing in.

Source: POEMS 2.0. – Stock Analytics [4]

Great Eastern’s revenue has been increasing over time. This is good news for shareholders as the business earns more revenue each year.

What about the bottom line?

Source: POEMS 2.0. – Stock Analytics

According to data retrieved from POEMS 2.0. Stock analytics, earnings per share have been steady, ranging from $1.50 to about $2.50 per share for the past 5 years.

That is great news, because as an investor you want to be in a business that earns profits consistently.

It is difficult to predict who will make a claim on their insurance, so for Great Eastern’s ability to have a steady EPS speaks volumes.

Source: POEMS 2.0. – Stock Analytics

Source: Great Eastern Annual Report [2]

Great Eastern also shares its profits with shareholders through dividends.

And consistent dividends tell us that the management is confident of achieving such earnings in the long run.

The company’s positive free cash flow gives us the assurance that the company is not paying dividends out of debt but out of what it has.

Combined Ratio

Combined ratio is used to assess the profitability of insurance companies and can be used to look at how Great Eastern fares.

Source: Investopedia [3]

A ratio of < 100% is good as it shows that the company is earning more than its expenses.

To be conservative, I have included total expenses and the combined ratio is still below 100% which is good.

The Price Is Right…?

If you choose to invest in Great Eastern, you may want to consider the price you enter at.

Ultimately, the price is what you pay and you want a margin of safety. And who would say no to paying 50 cents to buy a dollar bill?

Source: POEMS 2.0.

Judging from the increasing sales that Great Eastern is enjoying, the price-to-sales ratio is telling us that this stock is currently undervalued. So decide accordingly.



The business looks good. However, the share volume seems a bit on the low side with an average traded volume of just over 100,000 a week.

Do note that this share is not for trading but for investors with a long-term perspective.

Source: POEMS 2.0. – Stock Analytics

Going Forward

Is it a good business? I would say that as a business owner you want your business to be earning consistently.

Is there more room for growth? I believe so, as they are already operating in Singapore, Malaysia and other parts of Asia. And they can grow the business if the company continues to expand.

According to a recent press release, we know that Great Eastern is strengthening its distribution network, core channels of Agency/Financial Adviser Representatives s and selling products through banks using digital tools.

Also, besides digitising its business and strengthening what it already has, Great Eastern continues recruiting financial adviser representatives across the region. [2]

Haw Par (SGX: H02)

Have you heard of Tiger balm? If you are a Singaporean, chances are you know about it, and

may even be a user of this product.

Haw Par Corporation Limited is in the business of healthcare products and Tiger balm is one of them.

The company has 4 business segments:

  1. Manufacturing, marketing and trading of healthcare products
  2. Investments in securities
  3. Property rental
  4. Provision of leisure-related goods and servicesLet’s now look at some numbers to see how Haw Par is doing.

Haw Par Financial Data

Source: POEMS 2.0. – Stock Analytics

The revenue refers to sales from healthcare and its leisure and property business, and does not include investment in securities.

Haw Par’s revenue was affected by weak consumer spending due to the COVID-19 pandemic and we can tell that from the drop in revenue.

Source: POEMS 2.0. – Stock Analytics

But thanks to its investments in the securities business, earnings per share (diluted) were still comparable to FY2017 despite the drop in revenue.

Source: POEMS 2.0. – Stock Analytics

The dividend per share has been steady, giving shareholders a share of the profits, and this tells us that the management is willing to share its profits.

Source: Haw Par Annual Report [5]

The cash flow is still positive but falling. However the dividends are not paid out of debt.

The Price Is Right…?

Source: POEMS 2.0.

On a price-to-sales basis, I would say Haw Par is slightly on the higher side.

A Word On Price-To-Sales Ratio

But do note that we are looking at each company’s historical price-to-sales ratio to gauge if the company is considered over or undervalued.

Great Eastern and Haw Par are 2 stocks in the healthcare sectors, but doing different business. Hence, it is important to understand the context before we conclude that one is cheaper than the other.


Free Cash Flow

If its free cash flow is trending down, that could be a cause for concern.

So, can the investment segment continue to do well to make up for its healthcare business? This is hard to say.


Despite the falling revenue, the prices continue to remain high. So, from a long-term investor’s point of view, a good move would be to wait.

Going Forward

With its global network in 100 countries, the company is in a strategic position to expand business operations.

Haw Par’s leisure and property business is still a small contributor to its revenue. So, this could mean it has potential to grow further, especially after the COVID-19 situation improves. But this could probably take some time.


In conclusion, healthcare is definitely a business that is evergreen. Health is wealth and we do not lack buyers who demand some form of treatment and protection.

As investors, however, we want to focus on getting in at a good price in a good business.

As Warren Buffett once said: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

Using the price-to-sales ratio is a reasonable way to assess what is considered to be a good price.

But most importantly, manage your risks, buy good businesses, and you will do fine.


How to get started

As the pioneer of Singapore’s online trading, POEMS’ award-winning suite of trading platforms offers investors and traders more than 40,000 financial products across global exchanges.

Explore an array of US shares with brokerage fees as low as US$1.88 flat* when you open a Cash Plus Account with us today. Find out more here. T&Cs apply.

We hope that you have found value reading this article! If you do not have a POEMS account, you may visit this link or scan the QR code below to open one with us today!

Open a POEMS account within minutes and trade instantly!

Explore a myriad of useful features including TradingView chartings to conduct technical analysis with over 100 technical indicators available!

Take this opportunity to expand your trading portfolio with our wide range of products including Stocks, CFDs, ETFs, Unit Trusts and more across 15 global exchanges available for you anytime and anywhere to elevate you as a better trader using our POEMS Mobile 3 App!

For enquiries, please email us at cfd@phillip.com.sg. If you are interested in active discussions, you can also join our Telegram community here.


More Articles

The Ultimate Guide to Trading and Investing in Stocks Listed in HKEX

Fun fact: Did you know? The Hong Kong Stock Exchange finished 2020 as the second-biggest IPO market globally! Read our latest article to find out more!

Can Value Still Be Found in Alibaba Group Holding?


Can Value still be found in Alibaba Group Holding? Read our article to find out more!

Hang Seng Index's Biggest Revamp in 51-Year- History: Winners & Losers

Who are the potential winners and losers for the revamp of the Hang Seng Index? Read on our article to find out more!


This material is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to buy or sell the investment product mentioned. It does not have any regard to your specific investment objectives, financial situation or any of your particular needs. Accordingly, no warranty whatsoever is given and not liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of your acting based on this information.

Investments are subject to investment risks. The risk of loss in leveraged trading can be substantial. You may sustain losses in excess of your initial funds and may be called upon to deposit additional margin funds at short notice. If the required funds are not provided within the prescribed time, your positions may be liquidated. The resulting deficits in your account are subject to penalty charges. The value of investments denominated in foreign currencies may diminish or increase due to changes in the rates of exchange. You should also be aware of the commissions and finance costs involved in trading leveraged products. This product may not be suitable for clients whose investment objective is preservation of capital and/or whose risk tolerance is low. Clients are advised to understand the nature and risks involved in margin trading.

You may wish to obtain advice from a qualified financial adviser, pursuant to a separate engagement, before making a commitment to purchase any of the investment products mentioned herein. In the event that you choose not to obtain advice from a qualified financial adviser, you should assess and consider whether the investment product is suitable for you before proceeding to invest and we do not offer any advice in this regard unless mandated to do so by way of a separate engagement. You are advised to read the trading account Terms & Conditions and Risk Disclosure Statement (available online at www.poems.com.sg) before trading in this product.

Any CFD offered is not approved or endorsed by the issuer or originator of the underlying securities and the issuer or originator is not privy to the CFD contract. This advertisement has not been reviewed by the Monetary Authority of Singapore (MAS).