AUSTRALIANHEALTHSERVICES0927

1、pathologyoutlays($)growthrate(%)jul05jan06jul06jan07jul07jan08jul08jan09jul09jan10jul10jan11jul11jan12jul1226 september 2012asia pacific/australiaequity researchclinical laboratories (health care) / market weightaustralian health servicesresearch analystssaul hadassin61 2 8205 4679saul.hadassincredi

2、t-william dunlop61 2 8205 4405william.dunlopcredit-catalyst alertwaiting for clarification on pathology cuts august medicare data: 1) pathology non-hospital peis (proxy forcommunity path referrals) grew 3.7 % on a 12-month rolling average basis,below the long-term trend of 6.2%; pathology outlays gr

3、owth of 5.1% was alsolower than in july (6.5%). 2) gp attendances 12-month rolling averagevolume growth of 4.1% was slightly below 4.8% at july but remains above thelong-term growth rate (3.5%). 12-month rolling average outlays growth at 6.8%was lower than 7.6% as of july. 3) diagnostic imaging 12-m

4、onth rollingvolume growth of 7.1% was less than 8.0% as of july; as was 12-month rollinggrowth of 9.8% compared with 10.7% as of july. stock implications: no change to target prices, ratings, earnings (shla$13.50, neutral; pry a$3.65, neutral). volume and outlays growth forgp services, pathology and

5、 diagnostics all declined in august in whatwas a relatively weak month versus the pcp. that said, 12-monthgrowth is still robust across all measures. all eyes are on the impending pathology funding decision by thefederal government, which we expect to be announced in the nextfortnight. lower trendin

6、g 12-month rolling pathology outlays growth ofaugust (to 5.1%) should somewhat ease concerns that the government willreduce pathology test funding by more than the 1-2% (from november 2012)that would bring expenditure back in line with 5% per annum growth set outin the 2011 pathology funding agreeme

7、nt. however, with federal treasurerwayne swan recently flagging upcoming total government expenditure cutswith labour social values (as reported in the media), in our view there isstill a small risk of an unexpectedly large fee cut to medicare pathologyfunding in fy13. we suspect that we are not alo

8、ne in holding this view both shl and pry are likely to experience a small price re-rate shouldpathology funding cuts be in the 1-2% range.figure 1: total pathology outlays and 12-month rolling growth$240mn$220mn$200mn$180mn$160mn$140mn$120mn$100mn$80mn$60mn$40mn$20mn$0mntotal australian pathology ou

9、tlays ($)growth (% pa 12mth rolling)12%10%8%6%4%2%0%-2%-4%source: doha, medicaredisclosure appendix contains analyst certifications and the status of non-us analysts. u.s.disclosure: credit suisse does and seeks to do business with companies covered in its research reports. as a result,investors sho

10、uld be aware that the firm may have a conflict of interest that could affect the objectivity of this report. investorsshould consider this report as only a single factor in making their investment decision.credit suisse securities research & analyticsbeyond informationtmclient-driven solutions, insi

11、ghts, and accesspathologyoutlays($)jul-12may-12mar-12jan-12nov-11sep-11jul-11may-11mar-11jan-11nov-10sep-10jul-10may-10mar-10jan-10nov-09sep-09jul-09may-09mar-09jan-09nov-08sep-08jul-08may-08mar-08jan-08nov-07sep-07jul-07may-07mar-07jan-07nov-06sep-06jul-06may-06mar-06jan-06nov-05sep-05jul-05growthr

12、ate(%)aug-12jul05jan06jul06jan07jul07jan08jul08jan09jul09jan10jul10jan11jul11jan12jul12jun-94dec-94jun-95dec-95jun-96dec-96jun-97dec-97jun-98dec-98jun-99dec-99jun-00dec-00jun-01dec-01jun-02dec-02jun-03dec-03jun-04dec-04jun-05dec-05jun-06dec-06jun-07dec-07jun-08dec-08jun-09dec-09jun-10dec-10jun-11dec

13、-11jun-12apr-09may-09jun-09jul-09aug-09sep-09oct-09nov-09dec-09jan-10feb-10mar-10apr-10may-10jun-10jul-10aug-10sep-10oct-10nov-10dec-10jan-11feb-11mar-11apr-11may-11jun-11jul-11aug-11sep-11oct-11nov-11dec-11jan-12feb-12mar-12apr-12may-12jun-12jul-12ooooo226 september 2012august medicare datapatholog

14、y outlays growth moderatesaugust test volumesaugust volumes (ex-pei) increased only 2.2% versus pcp noting the dataseries remains volatile and are therefore difficult to interpret.12-month rolling growth of 4.0% was lower than the 5.3% recorded injuly.august referralsnon-hospital peis (a proxy for g

15、p/specialist pathology referrals) grew3.7% on a 12-month rolling basis, down from 5.5% as of july and belowthe long-term trend of 6.2% (figure 2).pathology referrals per gp attendance remained stable comparedwith july at 0.17 (figure 4, figure 5).august outlayson a 12-month rolling basis, outlays gr

16、owth of 5.1% was lower than6.4% as of july (figure 3) and below the long-term average of 6.5%.figure 2: non-hospital pei volumes, 12m rolling growthfigure 3: pathology outlays ($) and 12-mth growth (%)2,250mn$240mn12%2,000mn1,750mn1,500mn12%10%8%6%$220mn$200mn$180mn$160mn$140mn10%8%6%1,250mn$120mn4%

17、1,000mn750mn500mn4%2%0%$100mn$80mn$60mn$40mn2%0%250mn0mntotal non-hospital pei12 month rolling growth-2%-4%$20mn$0mntotal australian pathology outlays ($)growth (% pa 12mth rolling)-2%-4%source: medicare, credit suisse estimatesfigure 4: non-hospital pei per gp attendance (proxy forgp referrals)0.17

18、50.1700.1650.1600.1550.1500.1450.1400.1350.1300.1250.1200.1150.1100.1050.1000.0950.090source: medicare, credit suisse estimatesfigure 5: recent trend of 0.17 non-hospital peis per gpholding steady0.1740.1730.1720.1710.1700.1690.1680.1670.1660.1650.1640.1630.1620.0850.1610.0800.0750.070average non-ho

19、spital pei per gp attendance (12 month rolling)source: medicare, credit suisse estimatesaustralian health services0.1600.159average non-hospital pei per gp attendance (12 month rolling)source: medicare, credit suisse estimatesjan-07jul-07jan-08jul-08jan-09jul-09jan-10jul-10jan-11jul-11jan-12jul-12ja

20、n07jul07jan08jul08jan09jul09jan10jul-10jan-11jul11jan-12jul-12326 september 2012figure 6: pathology outlays/volume growth volumes showing early signs, outlays feeling fee cutspathology outlays ($)yoy grow th rate (%)pathology outlays ($)12 m onth rolling grow th rate(%)pathology volum eyoy grow th r

21、ate (%)pathology volum e12 m onth rolling grow th rate(%)cytopathhaem atolcytopathhaem atolcytopathhaem atolcytopathhaem atoltotalologychem icalogytotalologychem icalogytotalologychem icalogytotalologychem icalogyaug-11sep-11oct-11nov-11dec-11jan-12feb-12mar-12apr-12may-12jun-12jul-12aug-1219.5%1.0%

22、-0.4%1.0%-11.4%55.1%6.2%-10.6%3.7%16.3%8.7%10.0%3.6%16.7%-1.5%-2.6%-0.7%-12.6%51.1%7.4%-12.8%-2.8%11.2%5.5%2.9%-2.1%18.5%0.0%-1.7%1.7%-10.9%62.1%8.0%-10.6%4.6%19.3%13.6%11.7%5.1%16.9%-1.4%-1.4%-2.0%-13.8%46.7%1.2%-13.1%2.0%10.8%3.2%8.2%2.0%7.5%7.9%7.0%8.0%5.0%8.9%7.1%4.6%4.9%5.3%6.7%6.4%5.1%3.2%3.6%

23、2.8%3.8%1.2%4.7%3.7%1.8%1.7%2.3%4.1%3.3%1.7%8.9%8.5%6.8%7.7%4.7%8.9%7.1%4.7%5.1%5.7%7.7%7.4%6.3%6.3%6.3%5.4%6.0%3.1%6.8%4.7%2.3%2.6%2.5%3.5%3.3%2.1%18.4%0.1%-1.3%0.2%-12.2%54.5%4.8%-11.9%2.9%14.8%7.7%8.1%2.2%17.8%-2.2%-1.9%0.1%-10.9%58.8%8.9%-13.5%-3.9%12.7%5.9%1.0%-3.9%17.3%-0.7%-1.9%0.8%-11.8%59.3

24、%6.0%-11.7%3.6%16.6%10.2%9.4%2.8%16.1%-1.7%-2.2%-2.6%-14.8%45.3%0.2%-13.8%0.9%9.4%2.9%7.0%1.3%7.6%7.6%6.3%7.1%4.1%8.1%6.1%3.7%4.0%4.3%5.7%5.3%4.0%3.1%3.4%2.6%3.8%1.3%5.1%4.2%2.2%2.0%2.9%4.9%3.9%2.0%7.2%7.0%5.6%6.6%3.6%7.8%6.0%3.6%4.1%4.6%6.3%5.9%4.7%6.3%6.3%5.2%5.8%2.8%6.4%4.1%1.7%1.9%1.8%2.8%2.5%1.

25、3%source: medicare, credit suisse estimatesgp services growth remains ahead of trendaugust gp attendance volumes grew 2.4% on the pcp; 12-month rolling growth of4.1% was down on the 4.8% recorded as at july (figure 7) but remains above thelong-term growth rate (3.6%).august outlays grew 4.9% on the

26、pcp with 12-month rolling growth at 6.8%, less than7.6% as of july. (figure 8).figure 7: gp service volumes and growth (%)figure 8: gp service outlays ($) and growth (%)12mn11mn7%6%$500mn12%10%$450mn5%10mn9mn8mn4%3%$400mn$350mn8%6%2%$300mn4%7mn6mnaustralian gp services (attendances)12 month rolling

27、growth (%)1%0%$250mn$200mnaustralian gp services outlays ($)12 month rolling growth (%)2%0%source: medicare, credit suisse estimatesfigure 9: gp attendances/outlays growthsource: medicare, credit suisse estimatesgp services outlays ($)yoy grow th rate (%)gp services outlays ($)12 m onth rolling grow

28、 th rate(%)gp services volum eyoy grow th rate (%)gp services volum e12 m onth rolling grow th rate(%)australianswvicqldaustralianswvicqldaustralianswvicqldaustralianswvicqldaug-11sep-11oct-11nov-11dec-11jan-12feb-12mar-12apr-12may-12jun-12jul-12aug-1213.6%4.0%6.7%3.4%4.6%11.9%11.7%2.2%7.5%10.7%3.7%

29、12.5%4.9%11.8%2.4%8.6%1.8%4.8%11.8%10.7%1.6%7.8%8.5%5.3%9.7%4.1%13.0%4.4%5.5%3.7%4.0%9.5%11.4%2.0%7.3%11.7%2.5%15.5%3.1%18.4%6.0%8.4%4.8%5.1%15.8%13.5%2.6%8.6%11.2%3.7%14.2%8.1%7.4%6.9%7.5%6.7%6.7%6.9%7.4%6.9%7.3%7.2%6.8%7.6%6.8%6.8%6.3%7.0%6.2%6.2%6.3%6.8%6.6%7.0%6.5%6.4%6.9%6.2%7.5%6.8%7.4%6.7%6.6

30、%6.6%6.9%6.2%6.6%6.8%6.3%7.5%6.6%9.2%8.7%9.2%8.5%8.3%9.0%9.6%9.0%9.4%9.1%8.5%9.2%8.3%10.2%0.8%3.1%0.8%2.0%9.0%9.2%0.0%4.7%7.7%1.1%9.8%2.4%8.6%-0.5%5.4%-0.7%2.5%9.1%8.5%-0.3%5.4%5.9%3.2%6.9%1.5%9.9%1.3%2.2%1.8%1.9%7.5%9.6%0.3%4.8%9.5%0.8%13.4%0.8%14.1%1.5%3.7%1.2%1.5%10.7%9.6%-0.6%4.4%6.8%-1.1%10.0%5

31、.2%3.4%2.9%3.6%3.1%3.2%3.5%4.1%3.8%4.3%4.3%4.0%4.8%4.1%3.1%2.5%3.4%2.8%2.9%3.1%3.7%3.7%4.3%3.9%3.8%4.4%3.7%4.0%3.3%4.0%3.5%3.6%3.7%4.1%3.6%4.0%4.3%4.0%5.2%4.3%4.2%3.7%4.4%3.8%3.7%4.4%5.0%4.7%5.2%5.1%4.4%5.0%4.3%source: medicare, credit suisse estimatesaustralian health servicesjul00jan01jul01jan02ju

32、l02jan03jul03jan04jul04jan05jul05jan06jul06jan07jul07jan08jul08jan09jul09jan10jul10jan11jul11jan12jul12jul00jan01jul01jan02jul02jan03jul03jan04jul04jan05jul05jan06jul06jan07jul07jan08jul08jan09jul09jan10jul10jan11jul11jan12jul12426 september 2012di volume growth high, outlays growth still strongaugu

33、st volumes increased 4.0% versus pcp while 12-month rolling growth was 7.1%,lower than 8.0% as of july (figure 10) growth remains well above the long-term averageof 5.1%.august outlays grew 6.4% versus the pcp and 9.8% on a 12-month rolling basis, vs10.7% in july (figure 11).di modality trends are s

34、hown in figure 13 positive ct scan growth continued inaugust, along with exceptionally strong diagnostic radiology growth (predominantly x-rays).figure 10: diagnostic imaging volumes and growth (%)figure 11: diagnostic imaging outlays ($) and growth (%)2,000k1,800k1,600k1,400k1,200k1,000k800k600k10%

35、9%8%7%6%5%4%3%$220mn$200mn$180mn$160mn$140mn$120mn$100mn$80mn$60mn13%12%11%10%9%8%7%6%5%4%3%400k200k0ktotal australian diagnostics volumegrowth (% pa 12mth rolling)2%1%0%$40mn$20mn$0mntotal australian diagnostics outlays ($)growth (% pa 12mth rolling)2%1%0%source: medicare, credit suisse estimatesfi

36、gure 12: di outlays/volume growthsource: medicare, credit suisse estimatesdiagnostics outlays ($)yoy grow th rate (%)ultrasoun tom ogradiagnostics outlays ($)12 m onth rolling grow th rate(%)ultrasoun tom ogradiagnostics volum eyoy grow th rate (%)ultrasoun tom ogradiagnostics volum e12 m onth rolli

37、ng grow th rate(%)ultrasoun tom ogratotaldphyradiologytotaldphyradiologytotaldphyradiologytotaldphyradiologyaug-11sep-11oct-11nov-11dec-11jan-12feb-12mar-12apr-12may-12jun-12jul-12aug-1216.5%5.9%8.6%9.5%5.7%18.3%16.6%6.0%9.5%17.0%4.9%11.6%6.4%17.5%8.2%9.5%9.7%6.5%18.8%17.6%6.5%8.6%18.0%6.0%12.7%7.7%

38、20.4%9.8%13.0%17.0%12.3%24.4%24.6%12.6%18.9%22.8%10.7%14.0%8.1%11.4%-2.1%1.4%0.4%-1.9%8.9%7.1%-4.5%0.7%7.5%-4.8%8.9%-0.4%7.4%6.9%7.2%7.0%7.3%8.3%9.2%9.2%9.8%10.4%10.1%10.7%9.8%9.3%8.8%9.0%8.6%8.6%9.4%10.2%10.1%10.6%11.1%10.9%11.5%10.6%4.6%4.8%5.8%6.8%8.5%10.5%12.9%13.8%15.0%15.9%16.0%16.5%15.4%7.1%5

39、.7%5.4%4.3%3.8%3.4%3.6%2.4%2.6%2.5%1.6%2.6%1.6%14.2%3.4%4.9%5.7%3.0%14.6%12.9%1.5%6.0%12.2%8.8%10.3%4.0%17.1%7.8%9.0%9.1%6.0%18.7%17.4%6.1%8.6%17.2%5.7%12.2%7.4%20.6%9.7%12.5%16.6%13.2%25.0%24.9%12.3%19.4%23.2%10.4%14.2%7.1%10.3%-1.6%-0.5%0.3%-1.8%8.6%6.6%-5.0%1.0%5.7%11.4%8.2%0.4%6.2%6.0%6.4%5.9%5.

40、7%6.4%6.5%5.9%6.4%6.5%7.3%8.0%7.1%7.8%7.9%8.6%8.2%8.0%8.9%9.8%9.6%10.2%10.7%10.5%11.1%10.3%7.1%8.1%10.0%11.3%12.8%15.1%12.7%13.6%15.0%15.9%16.1%16.7%15.4%4.3%3.6%3.5%2.5%2.0%2.2%2.3%1.0%1.2%0.8%2.6%3.4%2.5%source: medicare, credit suisse estimatesaustralian health servicesjul-06nov-06 mar-07jul-07no

41、v-07 mar-08jul-08nov-08 mar-09jul-09nov-09 mar-10jul-10nov-10 mar-11jul-11nov-11 mar-12jul-12mri526 september 2012figure 13: di modality trends20%18%15%13%10%8%5%3%0%-3%-5%-8%-10%ultrasoundcomputerised tomographydiagnostic radiologynuclear medicine imagingsource: medicare, credit suisse estimatesint

42、erpreting the data take care, trend is keywe highlight that care needs to be taken when interpreting medicare data for several reasons:(1) data submission: changes to medicare claims submission procedures (such as shiftto medicare online) have resulted in significant monthly swings in data. we focus

43、 on12-month average growth rates to account for this.(2) additional funding sources: while a major contributor, medicare funding is not theonly source of revenue for providers. for example, pathology companies receive aproportion of revenues from additional sources, including patient co-pays, depart

44、mentof veterans affairs (dva), third-party and workers compensation claims, insurancescreening and privately billed tests (for which there is no scheduled fee).(3) funding to public hospitals: in assessing market growth it is important to note thatnot all medicare outlays will flow to private provid

45、ers. for example, where a privatepatient is being treated in a public hospital, mbs funding will go to the hospital labperforming pathology testing as part of the admission.(4) limits on reimbursement: in pathology, the term episode cone describes anarrangement under which medicare benefits payable

46、in a patient episode for a set ofpathology services, containing more than three items, ordered by a gp for a non-hospitalised patient. this will be equivalent to the sum of the benefits for the threeitems with the highest schedule fees. therefore, medicare data do not completelyreflect total volume

47、of tests conducted by industry versus what was paid out.as a result of these factors, we believe the key to interpreting the data is to assess trendsover a period of time regarding outlays and volumes.australian health services20142015otherwise stated2013equiv. fpogrowthmargincpayoutfrankingfreeeffe

48、ctive taxxev/ebitev/ebitdadividend yieldyieldxxreturnprofit marginasset turnoverequity multiplierreturnreturnnet debt tonet debt toxint cover (ebitda/net int.)int cover (ebit/net int.)capex to salescapex to depreciation626 september 2012figure 14: shl financial summarysonic healthcare (shl)201120122

49、013year ending 30 jun20112012 in audmn, unless 2014 2015share price: a$13.2526/09/2012 16:48earnings06/11a06/12a06/13e06/14e06/15eratingneutralc_eps_shares (period avg.)mn390.2391.8402.3407.1410.1target pricevs share pricedcfa$%a$13.501.8913.50c_eps*100(normalised)eps_growth*100c_ebitda_margin*100c%

50、75.518.480.76.918.786.16.719.494.810.219.6104.19.819.9sonic healthcare is one of the worlds largest medical diagnostics companies, providingc_dps*10059.059.061.065.373.1laboratory and radiology services to medical practitioners, hospitals, community healthservices, and their collective patients.c_pa

51、yout*100franking*100c_fcf_ps*100%c78.228.070.073.140.989.270.945.091.068.845.0105.0profit & loss06/11a06/12a06/13e06/14e06/15ec_tax_rate*100rate%24.624.026.026.026.0sales revenue3,090.13,342.83,487.33,714.73,958.2valuationebitdadepr. & amort.ebitassociatesnet interest exp.other570.1(114.

52、9)455.20.0(64.8)0.0624.1(132.1)492.10.0(74.1)0.0677.5(137.9)539.60.0(68.4)0.0728.8(137.6)591.20.0(65.9)0.0787.0(141.4)645.60.0(64.6)0.0c_pep/ec_ebit_multiple_currc_ebitda_multiple_cuc_div_yield*100c_fcf_yield*100c_pbprice to bookxx%x17.614.82.016.413.82.015.46.91.914.01

53、7.31.8profit before tax390.4417.9471.2525.3581.0returnsincome taxprofit after taxminoritiespreferred dividendsassociates & othernormalised npat(95.9)294.50.00.00.0294.5(100.2)317.7(1.7)0.00.0316.0(122.5)348.7(2.5)0.00.0346.2(136.6)388.8(2.8)0.00.0385.9(151.1)429.9(3.1)0.0

54、0.0426.8c_roe*100 on equityc_i_npat/c_i_sales*100c_i_sales/c_b_tot_assc_assets/c_eq_commonc_roa*100 on assetsc_roic*100 on invested cap.%1.87.310.413.87.711.4unusual item after tax0.00.00.00.00.0gearingreported npat294.531

55、6.0346.2385.9426.8 c_gearing*100net debt + equity%37.937.633.629.825.6c_net_debt/c_i_ebitdax1.71.4balance sheetcash & equivalents06/11a174.706/12a168.606/13e322.806/14e487.206/15e c_i_ebitda/ c_i_net_interest x664.4 c_i_ebit/ c_i_net_interest8.87.07.911.19.012.210.0inventoriesrecei

56、vables53.4402.955.7447.857.8443.461.2472.165.1 (c_c_capex/c_i_sales)*-100503.8 (c_c_capex/c_i_depr)*-100%4.4144.04.1124.13.8115.03.4112.03.3112.0other current assets37.042.742.742.742.7current assetsproperty, plant & equip.intangiblesother non-current assetsnon-current assetstotal assetspayablesinte

57、rest bearing debtother liabilitiestotal liabilities667.9552.03,408.084.94,045.04,712.9233.71,710.3252.52,196.5714.8561.43,549.2103.44,214.04,928.8277.31,739.7301.72,318.6866.7586.23,566.1103.44,255.75,122.4264.51,739.7324.12,328.21,063.2599.83,542.3103.44,245.65,308.8281.01,739.7332.02,352.71,275.96

58、13.83,517.4103.44,234.65,510.6298.51,739.7339.82,378.0msci iva (esg) rating aa3.82.8credit suisse viewtp esg risk (%): -2tp risk comment: limited esg risk for shl -its business has little social and environmentalrisk. shls governance is adequate, and posesthe greatest risk out of each of th

59、e three esgcategories, particularly given shls relative lackof disclosure (although it is compliant withasx/asic requirements) compared to peers.net assetsordinary equityminority interestspreferred capital2,516.42,514.42.00.02,610.22,589.520.70.02,794.12,770.923.20.02,956.12,93,132.63,103

60、.429.20.01.8environmentstocklocal sectorsocialcountrygovernanceglobal sectorour esg risk is calculated by adding a small riskpremium to our dcf discount rate.total shareholder funds2,516.42,610.22,794.12,956.13,132.6net debtcashflowebitnet interestdepr & amorttax paidworking capitalotheroperating ca