Singapore Healthcare - Maybank Kim Eng 2019-05-13: Time For A Health-Check

Singapore Healthcare Sector - Maybank Kim Eng Research | SGinvestors.io RAFFLES MEDICAL GROUP LTD (SGX:BSL) HEALTH MANAGEMENT INTL LTD (SGX:588)

Singapore Healthcare - Time For A Health-Check


Initiate coverage on Raffles Medical Group (RMG) & Health Management International (HMI) with HOLD & BUY



Domestic trends still favourable

  • Raffles Medical Group and Health Management International’s domestic patient volumes in Singapore and Malaysia respectively are supported by:
    1. rising affluence and increased take up of insurance;
    2. older age demographic shift and increased incidences of chronic diseases; and
    3. overburdened public healthcare.
  • In Singapore, the population aged 65 and above is expected to account for 25% of the total by 2030 from an eighth in 2015. In Malaysia, this portion is expected to reach 11% in 2030 from 7% in 2018.


The direction of medical tourism winds have shifted

  • Aside from SGD strength, wages of doctors and nurses in Singapore are higher than in Malaysia and Thailand, which makes it difficult for domestic providers to compete with lower cost regional competitors on a price basis. Meanwhile, offerings from providers in these two countries are improving in terms of quality.
  • Raffles Medical Group’s revenue growth, which has lagged IHH HEALTHCARE BERHAD (SGX:Q0F)’s Singapore operations since 4Q16, may be an indicator that IHH Healthcare’s premium hospitals like Mount Elizabeth are more effective in attracting price-inelastic patients, while the budget conscious shift elsewhere regionally.
  • We believe Health Management International’s MMC remains well positioned to enjoy positive structural industry factors from medical tourism because it is a leader in medical tourism with a 10% market share in Malaysia and strong reputation in Indonesia. Foreign patients account for around 20% of the total at Health Management International.


Expansion plans, pain before gain







Lai Gene Lih CFA Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2019-05-13
SGX Stock Analyst Report HOLD INITIATE HOLD 1.05 SAME 1.130
BUY INITIATE BUY 0.68 SAME 0.800



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