2.15 K

$Raffles Medical(BSL)

Positive:
1) Higher reported earning from higher contribution from all division.
2) Healthy cash position at 111.9mil which can be used to further grow the business
3) Continue to grow it corporate business which attract more MNC to use RMG medical package for their staffs.

Negative:
1) Higher cost due to the recruitment of more doctors, specialists, nurses and ancillary staff to cater to the expansion of the existing business operations

Outlook
" "The slower economic growth in Singapore and the region may have a dampening effect on health care demand in general . The completion of Raffles Hospital extension planned later this year as well as the group's expansion to other regional markets in cities where there is strong demand for reliable quality health care will enable the group to enjoy greater synergies brought about by the expanded reach of our outpatient and inpatient services."

http://www.theedgemarkets.com.sg/article/r...

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11 comments
kc2024

Results within expectation. I am happy that its operating cash flow improved by 8% and capital expenditure decreased by 58%. With its current expansion, I think net profit will continue to lag its revenue growth for another year or two. Will continue to hold it for long term.

kc2024

Reply to @dagger : I took a look at what happened in 2001 when Raffles Hospital opened. That year they made a loss but its earning grew at CAGR of 29% from 2002 to 2012. Of course, the base is much larger now, so it might not grow at those rate. But the growth potential is definitely there.

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MrWolf

Reason for not adding more is that i feel the movement will be quite stagnant for RMG. The cash can be used to pick up better stock with higher dividend and growth such as CDG (blue chip + discount).

For RMG it will be like a fine wine, you need to let it brew for few years before smelling the aroma.

goh6570

Reply to @dagger : I rmb it came down to 2.37 and @MasterLeong has been shouting boat is back! haha... dunno who has boarded... ^^ CDG is not in my priority list... am watching other counters

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MrWolf

Dividend of 1.5cent per share declared. There will also be SCRIP option. I am currently vested in 8000 shares in RMG. Valuation might be a bit high but i am positive in their growth in the future together with their healthy balance sheet and cash position.

I will not add anymore to more holding but instead let it grow by taking more SCRIP instead of dividend. TP= 1.65 to reach in the next two years. 10% capital gain from current price.

mirage1981

Reply to @dagger : Good luck on RMG and may you huat on it. P/BV abit too high for my liking.


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