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MPL 只值 1.85:
Medibank Private slides back towards retail listing price
ABC Premium News | 9 June 2015
Investors in last year's $5.7 billion Medibank Private float are getting anxious.
The big institutional funds that forked out $2.15 a share are already underwater and the retail investors who paid the discounted price of $2 a share are not far off the same fate.
The current share price of around $2.05 is a fair way down on the peak of $2.56 in late February and, over the year to date, the company has been out performed by the broader ASX 200 index by about 15 per cent.
So what went wrong for a company with a prospectus forecasting robust revenue growth of 6.2 per cent, solid and expanding margins and operating profit growing annually at around 5 per cent?
The efficiencies being promised by its liberation from Government ownership are being swamped by a wave of brutal margin eroding factors.
Increasingly, policyholders are either downgrading to cheaper, lower-margin options or bailing out altogether, while the entire private health industry's growth prospects are slowing back to levels last seen in 2006.
An aging population will only add to the pressure of rapidly rising claim costs.
On top of that, Medibank is continually losing in its arm wrestle with the private hospitals, doctors and medical equipment makers.
Current private health system 'not sustainable'
The private health insurers - and Medibank Private in particular - are finding their customers are a fickle lot.
Currently Medibank is enduring a policy lapse rate of about 11 per cent but this is not being balanced by growth in its "core" high margin business.
In fact Medibank's core business has been losing market share for years and it is a trend that is accelerating.
In a detailed study of the private health industry, Morgan Stanley Research hit Medibank with a significant downgrade of its growth and earning prospects, noting it faced a "continuing bleed, worsening lapses and margin risks."
The key finding about the relationship between the insurers and private hospitals was the "maintenance of the status quo will not support a sustainable system nor will it provide maximum value to the Australian taxpayer."
Premium rises driving policyholders out
Affordability is undoubtedly the key driver of policyholders bailing out.
Premiums have risen on average about 6 per cent a year since 2010, or 32 per cent over five years.
The Federal Government's move to index the health insurance rebate to the CPI inflation rate from 2014 structurally shifts the burden of rising health inflation onto policyholders according to the Morgan Stanley report.
The report's author Daniel Toohey said that, despite Medibank Private increasing premiums by 6.6 per cent from April this year, the real out-of-pocket cost for most policy-holders is more like 8 per cent, or three times average wage inflation.
"This exacerbates affordability amidst a deteriorating cyclical backdrop of rising unemployment and benign wages growth," he added.
On Morgan Stanley's figures - with the industry now heading down towards 2 per cent annual growth - Medibank needs to slow the rate that current customers are letting their policies lapse from around 11 per cent to less than 9 per cent to staunch the bleeding.
Worryingly for Medibank, there is a strong likelihood the lapse rates could head the other way given customers are becoming increasingly price conscious and lapse rates are far higher in similar sectors such as life and car insurance.
Low margin ahm brand cannibalising Medibank
While the heritage Medibank brand still accounts for around 90 per cent of the business, it is shrinking, with the growth being delivered by the low-margin "ahm" brand.
The budget offshoot's 20 per cent growth certainly made the prospectus look better, but its very success is now threatening to cannibalise the more profitable back-book of longstanding policyholders according to Morgan Stanley.
Mr Toohey said there is a big risk that the longer Medibank relies on ahm - with 5 per cent lower margins - to "plug" its growth gap, the greater the "contagion risk" to the profitable back-book.
At the same time, competition from the mushrooming online brokers is educating a new generation of policyholders to shop around for the best deal out of the bewildering 48,000 products in the market.
Savvy shoppers are dropping options they are unlikely to use, driving up claim utilisation and again cutting margins.
"The rising competitive intensity, increasing advertising spend on acquiring customers, growth of online brokers, growing affordability issues and ease of switching make the task of tightening up lapses challenging," Mr Toohey noted.
Health insurance funds hospitals' offshore expansion: Morgan Stanley
All the time the hospitals have been thriving at the expense of the insurers.
Hospital margins have expanded by 25 per cent over the past decade while insurers' margins have shrunk, despite the 6 per cent per annum premium hikes.
"We have seen hospitals invest in "brownfield" developments delivering 15 per cent return on capital in three years," Mr Toohey said.
"In the case of Ramsay Health Care, the cash flows from the tax-subsidised private health insurance scheme have funded its acquisition of private hospitals in France.
"The funding of offshore acquisitions indirectly through the 'tax' that is Australian private health insurance really begs the question why on-going premium increases are indeed necessary."
Insurers also are paying a heavy price for prosthetic devices being fitted in the hospitals.
According to one submission to the Harper review on competition policy, Australian prosthetics carry a 47 per cent premium compared to equivalent overseas devices - or in other words, an extra impost of close to $600 million in 2013 just for being fitted in Australia.
The submission suggested that one third of the premium was captured by the hospitals and the rest by the manufacturers, while the tab is picked up by the insurers and taxpayers.
Insurers and hospitals trapped in 'prisoners' dilemma'
Mr Toohey said the insurers and hospitals were trapped in the classic game theory "prisoners' dilemma" where two parties pursue self-interest and ultimately come up with a result that leaves them in a worse position than if they co-operated with each other.
"The most rational outcome is for better negotiated outcomes for the private health insurers from hospitals on the proviso these are handed back to policyholders," Mr Toohey argued.
"Ultimately, the "pie" needs to grow via higher participation to alleviate pressure in the system, while changes to regulated price structures - such as prosthetics - seem unavoidable."
The bottom line in Morgan Stanley's research is that investors seeking an aggressive margin and earnings growth story in Medibank "face disappointment."
Indeed Morgan Stanley found that, at current levels, Medibank is expensive and there could still be a fair bit more pain for investors with a share price of $1.85 something like fair value.
This article was sourced from LexisNexis. |
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恳求高质量英文辞职信（附网络工程师找工心得） (2006-6-9) victor_cn 
楼主:operahouse
发表于 2015-5-6 11:06
我还是长线拿着吧，反正没多少股。刚刚开始学怎样炒股呢。
