Kim Heng inks deal with Singapore Energy Interconnections on submarine power projects
[SINGAPORE] Offshore marine services contractor Kim Heng has inked an agreement with a newly incorporated government-linked energy company to cooperate in submarine power projects, the Catalist-listed company said in a bourse filing said on Monday (Jun 9).
Kim Heng signed the non-binding memorandum of understanding (MOU) with Singapore Energy Interconnections (SGEI), which was set up in April and has been appointed by the government to oversee the development of cross-border interconnections to enable electricity imports.
The partnership covers the purposes of operating, repairing and maintaining submarine power cable systems within the Asean region, Kim Heng said.
The MOU remains in force until Jun 1, 2028, or on the execution of definitive agreements or mutual agreements to terminate it, the company added.
On May 30, SGEI entered a deal with Singa Renewables to jointly develop a sub-sea interconnector to enable low-carbon electricity imports from Indonesia to Singapore.
Singa Renewables is a joint venture between French energy company TotalEnergies and Singapore-headquartered resource-based manufacturing group RGE.
SGEI noted then that the project supports Singapore's target of importing up to 6 gigawatts of low-carbon electricity by 2035, and paves the way to realising the Asean Power Grid.
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Other factors driving investors to the healthcare sector – perceived as defensive, and so able to withstand the ups and downs of economic cycles – is the ongoing macroeconomic uncertainty and volatility in global financial markets. This is particularly so in Asia, where investors have been diversifying away from China in the last few years, to avoid being caught in the cross hairs of the nation's tensions with the United States. As PE firms and their investors focus on acquiring companies independent of China, more deals have been transacted in Japan, South Korea and India, where the demand for healthcare and related services is strong and largely unaffected by tariffs. 'Japan has always been a stable healthcare market, and particularly because of (its) demographics and medical needs,' said David Braga Malta, thematic health principal at Pictet Alternative Advisors, to BT. 'We saw some of the mid-sized Japanese pharma companies being very acquisitive in the recent months and years... And of course, we saw the boom in the IPO (initial public offering) markets in India last year.' BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Asia's appeal even drew European PE investors to buy South Korean assets for the first time in 2024, he added. Last September, France's Archimed spent US$742 million buying Jeisys Medical, a South Korean developer of aesthetic medicine devices. Like shopping in Louis Vuitton 'One of the key things that I always say to my investors is that... investing in healthcare in Asia is like shopping in Louis Vuitton. So, as an investor, we have to navigate that, be careful not to overpay,' said Quadria Capital's Mir. According to a Bain & Co report, global PE deal value in the sector surged last year to an estimated US$115 billion – the second highest on record. Bain added that PE firms continue to invest in healthcare in the Asia-Pacific, where deal values have been steadily rising since 2016. Industry participants named India as the country attracting the most number of healthcare PE investors. An ageing population, rising incidence of chronic disease and growing awareness of preventive care, combined with the opening up of its insurance market to foreign investment, are making India stand out. Bain estimated that the country made up 26 per cent of the 62 deals transacted in the Asia-Pacific last year. PwC said its health industries practice in India hit a double-digit compound annual growth rate in the past few years as well. But Ling Tok Hong, deals and private equity leader at PwC, cautioned that 'this continued focus on the India market could make it more susceptible to overvaluation if investors are not cautious'. South-east Asia's healthcare sector is also attracting PE investors, leading to 'unprecedented valuations' of Ebitda multiples in their 20s, noted Ling. He was referring to earnings before interest, taxes, depreciation and amortisation. Room for growth; returns still strong Despite the rising valuations in Asia's healthcare sector, market participants point out that there is still room for growth, a key factor backing the higher valuations in the first place. The sector offers attractive long-term growth prospects as the supply of quality healthcare assets in the region is not growing quickly enough to meet demand. In markets such as South-east Asia, 'the number of large, institutionally ready platforms is still limited. This scarcity has helped sustain high entry multiples in recent years', said Alex Boulton, partner and Asia-Pacific lead for healthcare and life sciences private equity at Bain. He pointed out that South-east Asia's healthcare sector relies heavily on private players. For instance, the private sector accounts for roughly half of all hospital beds in Indonesia and the Philippines. 'That structural dynamic creates an enduring role for private capital in expanding and upgrading healthcare infrastructure.' Market participants emphasise that Asian healthcare is not in bubble territory. Boulton pointed out that even with rising valuations, healthcare PE in Asia is still delivering strong returns. Bain's analysis shows that from 2018 to 2023, the median multiple on invested capital (MOIC) for exited healthcare deals in the region was approximately 2.6 – meaning that a US$1 million investment generated a return of US$2.6 million. This compares with the global median MOIC of around two. 'That speaks to the sector's ability to compound value through growth and operational improvement, even in a more expensive entry environment,' noted Boulton. That said, while returns are likely to remain strong in the future, the median MOIC may not be sustained at these levels, he added. Thus, market players said, investors will need to have a clear plan to create meaningful impact and value over the life of their investments.
