·         Shifa’s management is actively working on 3 distinct expansion projects which are expected to reach commercial operation during the next 12—34 months. These projects include i) Shifa National Hospital Faisalabad (36M gestation) which will initially have 250 beds capacity but will be gradually increased to 400 beds, ii) Shifa Medical Center Islamabad (24M gestation), initially this was meant to be an ambulatory facility, however, closure of OPDs during COVID-19 forced management to convert it into 100 beds facility and iii) Shifa Neuroscience Institute (12M gestation) , the project with potentially the highest expected ROE owing to value added services.

·         Shifa International is the only listed hospital on the bourse, giving exposure to country’s rapidly growing healthcare market. The hospital operates through 3 independent hospitals and offers a wide buffet of services. The hospital business is characterized by a stable revenue stream with steady cash generation given a direct exposure to urbanization and increase in consumer incomes and gross domestic healthcare expenditures.  

·         WHO estimates that private sector caters for ~74% of all outpatient visits as federal and provincial budget allocation for healthcare services is inadequate. This gets picked in public sector expenditure on health as percentage of GDP where Pakistan’s ratio stand at only 1.2% as opposed to ~5.0% advocated by WHO. This creates a huge demand-supply mismatch, a gap that is filled by private sector hospitals. 

Courtesy – AKD Research