Although the market as a whole has climbed higher today, one notably strong performer has been the NIB Holdings Limited (ASX: NHF) share price.
In afternoon trade the private health insurance provider's shares are up over 4% to $6.56.
Why are its shares higher?
NIB held its annual general meeting today and it appears as though investors were pleased with what management had to say.
Despite being faced with falling private health insurance participation rates, management has reiterated its full-year underlying operating profit guidance.
At its meeting management advised that it expects underlying operating profit to be at least $155 million and statutory operating profit to come in at $143 million.
Although this is little by way of improvement on FY 2017, investors appear to be pleased with it given current market conditions.
But perhaps the biggest driver of its share price gain today was its plans for the future. According to today's update, NIB plans to expand into the China market by selling critical illness products with Chinese pharmaceutical company Tasly Holding Group by the end of 2018.
The company estimates the Chinese health insurance market to be worth $48 billion in annual premium revenue presently and is forecast to grow by 37% per annum through to 2020.
Should you invest?
If the company can successfully expand into the China market then I believe it has the potential to generate significant revenue growth over the next decade, which could offset the weakness that it faces in the local market.
However, there is a long road ahead for the company and it is a competitive market.
I would suggest investors keep NIB on their watchlist and look closely to see how the expansion develops.
In the meantime, I think investors ought to consider private hospital operator Ramsay Health Care Limited (ASX: RHC) instead.
