Tuesday, November 10, 2015
Shares in Finnish healthcare services company Pihlajalinna were up more than 11 percent on Monday in response to government reforms that are expected to benefit private social and healthcare providers.
Finland on Saturday agreed a deal to cut future healthcare costs by 3 billion euros ($3.23 billion) as part of the government's plan to save 10 billion euros to balance public finances in the long term.
The reforms include legislation that allows people to choose between public and private healthcare service providers.
Pihlajalinna, which listed in June, owns hospitals and clinics and provides municipalities fully outsourced services in social and health care.
Companies such as Pihlajalinna will have an important role in the new system and have significant growth potential in that area, Petri Kajaani, equity research analyst at Inderes, said in a note.
"Rapidly ageing population, poor finances of municipalities and increased awareness of health issues will be growth drivers for Pihlajalinna," the analyst said.
"Pihlajalinna is a frontrunner in outsourced services, where the value of its contracts in the past year exceeded its sales in 2014. The scale of Pihlajalinna's business will change radically in the next few years," said Kajaani, who has a 'buy' recommendation and a target price of 15 euros for the stock.
Pihlajalinna, whose competitors include Mehilainen, Attendo and Terveystalo, is the only publicly listed healthcare services provider in Finland.
Its shares were up 11.2 percent by 1219 GMT, when the Helsinki market was broadly unchanged.
reuters.com
