Parkway Hldgs: Helped by international contribution

1Q09 within expectations. Headline net profit of S$21.3m (+9% y-o-y) was within expectations. Revenue grew +4% to S$237.8m, thanks to growth from overseas and Singapore Healthcare contribution.

Lower Singapore admissions. As a result of lower foreign patient admissions, revenue for Singapore Hospitals dipped by 9% to S$108.8m on lower admissions (-3.7%), offset by higher day cases (+8.8%). As a result, average length of stay dipped to 3.34 days, from 3.65 days in 1Q08. Net revenue per patient day declined -2.8% to S$1,811. Occupancy slipped to 58%, from 61.5% a year ago.

Offset by other operations and cost savings. Topline for the Group's International Hospital and Healthcare services divisions grew by 26% and 13% respectively. In addition, cost containment measures and savings from the Singapore Budget measures aided in its net profit growth. It was estimated that Budget measures will yield Parkway S$7m savings in FY09.

Maintain Hold, TP: $1.29. We maintain our Hold recommendation, as we believe the uncertain outlook and uncertainty on the response to Novena medical suites may cap gains in the near term. Our TP is adjusted up slightly to S$1.29 on a higher market value of its PREIT stake.

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