Target Price

 FY2016 Revenue of S$473.61 mn was in line with our forecast of S$486.26 mn
 FY2016 PATMI of S$70.21 mn missed our forecast by 8.1%. Surprise mainly came from
higher-than-expected losses from MCH and higher effective tax rate
 RafflesMedical to drive FY17F topline; Expect further margin compression before MCH
breakeven while RMG continues to gear up for expansion
 Final dividend of 1.5 Cents; FY2016 dividend of 2.0 Cents (same as FY2015)

Revenue growth driven by increased patient load and higher contributions from all segments, particularly from the newly acquired International SOS (MC Holdings) Pte Ltd and its subsidiaries (collectively known as “MCH”). Excluding MCH, top line would have grown by only 7.5% year-on-year (“yoy”). However, the increased staff costs from MCH remains a drag. Raffles Medical Group Ltd (“RMG”) has stepped up its cost management effort and expects to see better results in next few quarters.

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