Raffles Medical Group - OCBC Investment 2020-04-27: Gradual Recovery Path

RAFFLES MEDICAL GROUP LTD (SGX:BSL)

Raffles Medical Group - Gradual Recovery Path

Raffles Medical (SGX:BSL)'s 1Q20 profit after tax fell -45% y-o-y, as operations were impacted by the Covid-19 outbreak.
Adoption of half-yearly announcements (from quarterly releases) with more details awaited at the next results release for 1HFY20.
Group continues to engage patients via its digital platform during Covid-19 outbreak, and has seen encouraging signs of some return in patient traffic at its clinics in China and Raffles Hospital Chongqing.

While the Shanghai hospital opening preparations has been underway, given disruptions from the ongoing Covid19 outbreak, the hospital’s opening continues to hinge on when normalcy returns.

Raffles Medical's 1Q20 profit after tax of SGD7.5mn fell 45% y-o-y, while revenues of SGD128mn were flat at -0.2% y-o-y. EBITDA of SGD20.6mn fell 12.7% y-o-y. With the adoption of half-yearly announcements, we await more details at the next results update for 1HFY20. See Raffles Medical Announcements.
As per the prior update for 4QFY19 results, the group had launched a digital platform to faciliate patients engagement during Covid19 outbreak.
During 1Q20, Raffles Medical continues to mitigate Covid-19 impact through telemedicine application and delivery of medical supplies wherever deemed appropriate. Some walk-in patient traffic normalization has also been observed in Raffles Hospital Chongqing and clinics based in Beijing, Nanjing and Shanghai.

Raffles Medical's balance sheet health remains resilient with unutilized bank facilities exceeding SGD200mn available to be tapped if needed, while net gearing ratio was ~3.1% as of end 1Q20.

OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2020-04-27

SGX Stock Analyst Report HOLD MAINTAIN HOLD 1.020 SAME 1.020