Capitalizing On Australia’s Ageing Population

Australia’s population is much older today than it has been in the past, and both the number and proportion of older people is growing steadily. In 1964, the median age in Australia was 28.5 years, and 8% of the population (948,100 people) were aged 65 and over. Only 0.4% of the population (50,100 people) were aged 85 and over.

In 2014, the median age had increased by almost a decade to 37.3 years, and the number of people aged 65 and over had more than tripled to 3.4 million. Older people now account for an increasing share of the population—15% of Australians were aged 65 and over in 2014, compared to 8% in 1964. In addition, there has been a ninefold increase in the number of people aged 85 and over, up to 456,600 or 1.9% of the population in 2014.

These trends are predicted to continue into the future, particularly as the baby boomer generation ages. The first baby boomers were born in 1947 and turned 65 in 2012, and will slowly be moving in to the ‘old old’ cohort—those aged 85 and over. Based on population projections by the Australian Bureau of Statistics, by 2064 there will be 9.6 million people aged 65 and over, and 1.9 million aged 85 and over, constituting 23% and 5% of Australia’s projected population respectively Source

One may consider investing in companies that specialise in aged care services in Australia. One such company is SGX-listed G.K Goh.

G. K. Goh Holdings Limited (“GKGH”) is an investment holding company listed in Singapore with total assets in excess of S$600 million. From its roots in the securities business, GKGH now invests its shareholders funds into operating businesses and a range of long-term and liquid investments.

Among its major operating companies are Opal Aged Care, a leading Australian provider of residential aged care services and Boardroom Limited, a Singapore listed corporate services provider in Asia and Australia.

From a technical standpoint, GK Goh may appear to be on uptrend [?]. Nevertheless, a strong resistance level is expected around SGD0.93. One may consider trading pullback at around SGD0.88 with a possible profit target at least SGD1.00 and stop loss at SGD0.76.

TA

Fundamentally, at current PER of around 8.32x, GK Goh’s current valuation is not unreasonable (reducing the potential risk of overvaluation).

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Some support seen from trades by major shareholders:

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DISCLAIMER: THIS IS A PERSONAL BLOG AND SHALL NOT BE RELIED IN WHATSOEVER MANNER BY ANYONE. ALL ARTICLES CONTAINED IN THIS SITE ARE FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY, COMPLETENESS AND TIMELINESS. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS. THE AUTHOR MAY HOLD POSITIONS IN THE SECURITIES MENTIONED IN THE ARTICLES.

Author: Ken Utau

Data Scientist, Markets Analyst and Food Lover

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