THE D’Or Network (RDOR3) is close to consolidating the purchase of South America (SULA11), fourth largest operator of health insurance from Brazil.
Despite market doubts about potential synergies involving the acquisition, one thing is certain: the health in the country must enter a new chapter.
For the Itaú BBASulAmérica is likely to play an important role in Rede D’Or’s plans to expand its outpatient and diagnostic services, increasing its addressable market.
The institution also believes that, although there is a significant overlap in these acquisitions (both SulAmérica and Rede D’Or have a relevant concentration in the metropolitan regions of São Paulo and Rio de Janeiro), SulAmérica’s demand from its beneficiary base will guarantee a faster increase and risk reduction of substantial bed capacity.
In addition, the solid infrastructure of Rede D’Or could reinforce SulAmérica’s efforts to increase its participation in the medium-ticket segment with high growth potential through a network
closed, evaluates the BBA.
BBA points out that SulAmérica has enough cash to cover and guarantee its health care and social security provisions. With Rede D’Or, the institution expects to see more than R$ 1 billion in cash being released to finance other plans, such as the company’s inorganic growth.
partnerships
Regarding partnerships in the health sector, BBA considers it unlikely that, within the changes that the industry will experience after the consolidation of SulAmérica, Rede D’Or will remove the accredited networks of other payers.
The BBA explains that the absence of Rede D’Or from any health plan would cause “enormous friction” between operators and customers, as the company operates a large number of hospitals.
“It is reasonable to say that Bradesco Saúde could strengthen its relationship with suppliers that compete with Rede D’Or”, punctuate analysts at the institution, in a report released last week.
new estimates
After incorporating SulAmérica into the estimates for Rede D’Or, BBA started to see a resumption of the Ebitda margin to normalized levels after the end of the pressure of costs with materials and medicines.
Due to this pressure on costs, BBA now estimates that Rede D’Or’s net income will reach R$1.47 billion in 2022, down 16.5% from previous projections.
The stock’s buy recommendation was reiterated, with a target price of BRL 45 for the end of 2022 (against BRL 65 previously).
The BBA took advantage of the update to downgrade the Qualicorp (QUAL3), from “buy” to “neutral”, with a new target price of BRL 12, against BRL 23.
“Considering a more challenging scenario for organic growth and the soft results recently, we lowered our net profit expectations to R$ 302 million in 2022”, informs the institution.
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Source: Moneytimes
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