Raffles Medical Group - Maybank Kim Eng 2020-02-24: Raffles Hospital Shanghai Delayed

RAFFLES MEDICAL GROUP LTD (SGX:BSL) | SGinvestors.io RAFFLES MEDICAL GROUP LTD (SGX:BSL)

Raffles Medical Group - Raffles Hospital Shanghai Delayed


FY19E in line; maintain HOLD

  • Raffles Medical (SGX:BSL)’s 4Q19 net profit of SGD18.7m (-14.6% y-o-y) met our and consensus’ estimates.
  • Raffles Hospital Chongqing’s (RHCQ) gestation loss was SGD9.2m at the EBITDA level, within management’s guidance of SGD8- 10m.
  • We cut FY20-22E EPS by 1-6% respectively to factor in potential impact of Covid-19 on present operations, as well as the delayed opening of Raffles Hospital Shanghai (RHSH).
  • Our DCF-Target Price falls to SGD1.06 (LTG: 3%, COE: 9%). Maintain HOLD.



Still largely driven by Singapore in FY19

  • Raffles Medical's FY19 revenue rose 6.7%, of which healthcare services grew 9% due to increase corporate clients and greater scope of services for insurance contracts. Meanwhile, hospital services grew 5.9%, largely driven by domestic patient load. EBITDA rose 2.8% y-o-y, but would have risen 11.8% if not for gestation losses at RHCQ.


Potential impact from Covid-19

  • Using SARS as a guide, and assuming Covid-19 will have two quarters of negative impact to Raffles Medical, management estimates that around 6ppt of revenue growth potential may be affected. The negative impact will likely be in the form of lower volumes for elective surgeries, and/or foreign patients.
  • However, these may be partially mitigated by
    1. expanded border screening (e.g. at airports), and
    2. tele-consultations.


RHCQ has obtained Yibao; other China updates






Lai Gene Lih CFA Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2020-02-24
SGX Stock Analyst Report HOLD MAINTAIN HOLD 1.06 DOWN 1.070



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