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So many IPO recently! This time we look at DC Healthcare, a company involved in the business of becoming beautiful!

We are interested in studying more about the aesthetic business because this is the first one to be listed on Bursa.

Some key takeaways from studying DC Healthcare:

1. High growth industry but also high capex and high maintenance 

2. Success of business depends on whether the business can grow beyond their star doctor, Dr Chong

3. The capital allocation decision of the management is also a very important factor to consider given that they receive cash first and provide service later. 

Too many business has fallen with this business model because of bad capital allocation by the management. It is hard to reserve and deploy capital properly if you are flush with cash upfront.

So far, still no sign of the management of DC Healthcare being a great capital allocator.

4. The aesthetic business is similar to the healthcare business, it can demand high premium when compared to other industry.

Having said that, the financial numbers are especially high 2 years before their IPO, it remains to be seen if this is just window dressing to demand higher IPO price or DC Healthcare is really a gem.

What do you think?

https://youtu.be/We4zzR9UvqQ

So many IPO recently! This time we look at DC Healthcare, a company involved in the business of becoming beautiful!

We are interested in studying more about the aesthetic business because this is the first one to be listed on Bursa.

Some key takeaways from studying DC Healthcare:

1. High growth industry but also high capex and high maintenance 

2. Success of business depends on whether the business can grow beyond their star doctor, Dr Chong

3. The capital allocation decision of the management is also a very important factor to consider given that they receive cash first and provide service later. 

Too many business has fallen with this business model because of bad capital allocation by the management. It is hard to reserve and deploy capital properly if you are flush with cash upfront.

So far, still no sign of the management of DC Healthcare being a great capital allocator.

4. The aesthetic business is similar to the healthcare business, it can demand high premium when compared to other industry.

Having said that, the financial numbers are especially high 2 years before their IPO, it remains to be seen if this is just window dressing to demand higher IPO price or DC Healthcare is really a gem.

What do you think?