Our opinion on the current state of RHBOPHELO(RHB)RH Bophelo (RHB) is a black-owned African healthcare company that listed on the JSE in July 2017 as a "special purpose acquisition company" (SPAC) after raising R500m (50,000 shares at R10 per share). It has since acquired shares in African Healthcare (Pty) Ltd. (AHC), Vryburg Private Hospital (VPH), and Rondebosch Medical Center (Pty) Ltd. (RMC), resulting in its reclassification by the JSE on 30th September 2018. The company acquired 30% of RMC, a company that was independently valued at R34.6m.
In its results for the year to 29th February 2024, the company reported headline earnings per share (HEPS) of 282.3c compared with a loss of 49.8c in the previous period. The company's net asset value (NAV) increased 19% to 1599c per share. During the year, the company acquired:
- 29% of Ambit Health Proprietary Limited ("Pelo") for R1.075 million in March 2023. Pelo operates a pathology services company.
- 100% of MMed Distribution Services Proprietary Limited ("MMed") for a purchase price of R1. The company subsequently advanced a bridging loan of R4.8 million to assist in operations. MMed is a pharmaceutical distributor with distribution licenses across South Africa.
- RazoHealth Radiology Proprietary Limited ("Razohealth").
From a private investor's perspective, the primary issue with RH Bophelo is that it has almost no volume traded, and the share price has been falling, which makes it unattractive as an investment. Despite the company's positive financial results and strategic acquisitions, the lack of liquidity and declining share price present significant risks for potential investors.
