CIMB Fundamental View - Company Note: $Raffles Medical(BSL)
(REDUCE, tp:S$1.36) - Post analyst briefing update: Margins could yet worsen
■ We think it is still too premature to start turning positive on RFMD. Both 4Q16 topline and bottomline were weak, and costs could yet intensify.
■ Weak medical tourism, limited domestic growth and expansion costs are hitting the group’s hospital segment. Hospital saw its first ever PBT decline in FY16 (-3% yoy).
■ Losses at ISOS are also widening and route to profitability could take longer than expected.
■ We cut our EPS on slower sales growth and lower margins. Accordingly, our SOPbased TP falls to S$1.36. Maintain Reduce.