RHB Singapore Results Review
27 February 2018

$Raffles Medical(BSL.SI)
Lacklustre Outlook Due To Prevailing Headwinds

Raffles Medical Group booked a FY17 PATMI of SGD70.8m, ie slightly below our estimate. This was from a slower-than-expected turnaround in MCH Holdings, a decline in its healthcare services revenue, as well as a longer-than-expected rent-free period for its Holland V Medical Centre. We trim FY18-19F earnings by 5-10% respectively, as existing headwinds still prevail. Stay NEUTRAL, with a SGD1.02 TP (from SGD1.10, 7% downside).

Read more...

<< Find the latest in-depth research reports by logging into your RHB Invest account at www.rhbinvest.com.sg >>

Read more
RHBSecuritiesSG RHBSecuritiesSG 's post
Expiry:
Target Price
$1.7
(+9.68%)
NOW:

Raffles Medical maintained a steady 5% PATMI growth in 2Q16. However, we expect to see stronger growth from here on as its construction projects complete. We expect to see the following boosters in the coming quarters:
1. Rental contributions from its Holland V commercial building in 2H16;
2. Turnaround of International SOS in 1Q17;
3. Commencement of Raffles Hospital extension next year.
Maintain BUY with TP SGD1.70 (9% upside).

Read more
Attachment(s):

Recommended & Related Posts

RHB Singapore Results Review
2 May 2018

$Raffles Medical(BSL.SI)
Not Ripe Yet

Raffles Medical’s 1Q18 PATMI is in line with our expectation. We note that its share price has run up, after its 4Q17 results. Downgrade to SELL (from Neutral), with an unchanged SGD1.02 TP offering a 11% downside, as we think headwinds still lie ahead. Although 2H is seasonally stronger than 1H, we think it would be offset by higher costs when its hospital in Chongqing, China commences operations. We also expect to see a dip in earnings in FY19 when Raffles Medical Shanghai opens, while its Chongqing hospital would still be in a ramping-up phase.

Read the full thread...

<< Find the latest in-depth research reports by logging into your RHB Invest account at www.rhbinvest.com.sg >>

Read more
RHBSecuritiesSG RHBSecuritiesSG 's post
Expiry:
Target Price
$1.7
(+9.68%)
NOW:

Raffles Medical maintained a steady 5% PATMI growth in 2Q16. However, we expect to see stronger growth from here on as its construction projects complete. We expect to see the following boosters in the coming quarters:
1. Rental contributions from its Holland V commercial building in 2H16;
2. Turnaround of International SOS in 1Q17;
3. Commencement of Raffles Hospital extension next year.
Maintain BUY with TP SGD1.70 (9% upside).

Read more
Attachment(s):

RHB Singapore Results Review
31 October 2017

$Raffles Medical(BSL.SI)
Uninspiring Set Of Results

Raffles Medical recorded another flat quarter. 3Q17 PATMI came in at SGD16.4m (+1% YoY). However, given that its share price has dropped 18% since the poor set of results last quarter, we upgrade our recommendation to NEUTRAL (from Sell) with an unchanged DCF-derived TP of SGD1.10 (4% downside). The Singapore healthcare market is rather matured. As such, the timeline to the turnaround of the new Chinese hospitals is the key swing factor to its future earnings.

Read more...

<< Find the latest in-depth research reports by logging into your RHB Invest account at www.rhbinvest.com.sg >>

Read more
RHBSecuritiesSG RHBSecuritiesSG 's post
Expiry:
Target Price
$1.7
(+9.68%)
NOW:

Raffles Medical maintained a steady 5% PATMI growth in 2Q16. However, we expect to see stronger growth from here on as its construction projects complete. We expect to see the following boosters in the coming quarters:
1. Rental contributions from its Holland V commercial building in 2H16;
2. Turnaround of International SOS in 1Q17;
3. Commencement of Raffles Hospital extension next year.
Maintain BUY with TP SGD1.70 (9% upside).

Read more
Attachment(s):

RHB Singapore Results Review
1 August 2017

$Raffles Medical(BSL.SI)
Bear For a Couple More Years

Post analyst briefing, we understand from management that its hospitals in China would likely take three years to reach a positive EBITDA. We now turn bearish on Raffles Medical as near-term growth is mainly supported by rental income instead of organic growth; therefore we think there is a lack of an upside catalyst in the near term. Downgrade to SELL with a DCF-derived TP SGD1.10 (from SGD1.49) implying 14% downside.

Read more...

<< Find the latest in-depth research reports by logging into your RHB Invest account at www.rhbinvest.com.sg >>

Read more
RHBSecuritiesSG RHBSecuritiesSG 's post
Expiry:
Target Price
$1.7
(+9.68%)
NOW:

Raffles Medical maintained a steady 5% PATMI growth in 2Q16. However, we expect to see stronger growth from here on as its construction projects complete. We expect to see the following boosters in the coming quarters:
1. Rental contributions from its Holland V commercial building in 2H16;
2. Turnaround of International SOS in 1Q17;
3. Commencement of Raffles Hospital extension next year.
Maintain BUY with TP SGD1.70 (9% upside).

Read more
Attachment(s):
Expiry:
Target Price
$1.7
(+9.68%)
NOW:

Raffles Medical maintained a steady 5% PATMI growth in 2Q16. However, we expect to see stronger growth from here on as its construction projects complete. We expect to see the following boosters in the coming quarters:
1. Rental contributions from its Holland V commercial building in 2H16;
2. Turnaround of International SOS in 1Q17;
3. Commencement of Raffles Hospital extension next year.
Maintain BUY with TP SGD1.70 (9% upside).

Read more
Attachment(s):

RHB Singapore Strategy
3 January 2017

The outlook for Singapore’s key macro drivers remains lacklustre as a rising interest rate is expected to sap demand, leading to slower GDP growth. A slowdown in exports could also place downside risks on growth. However, our Top Picks in Consumer Staples, Healthcare, Land Transport, Offshore & Marine and REITs sectors should hold up well against a weak macroeconomic environment.

Macroeconomic headwinds to persist. Our economics team expects Singapore to witness another challenging year in 2017, with an expected decline in GDP growth rate, slowdown in exports growth, decline in manufacturing output and moderation in private consumption. We forecast GDP growth to slow to 1.2% in 2017, from an estimated 1.4% in 2016. This compares with the consensus GDP growth estimate of 1.5% for 2017. We believe easing of immigration policies and property cooling measures could provide some relief, but both seem unlikely in the near term.

More downgrades to index earnings likely. The FSSTI’s earnings experienced a contraction in 2016. Although the consensus 2017 index EPS estimate has declined by 15% during 2016, consensus is still forecasting EPS growth of 5% in 2017, which we believe may be difficult to achieve, if our more bearish view on the macroeconomic drivers holds true. We estimate 2017 EPS growth at 3.5%, which may also be at risk if there is a sharp deterioration in the economic outlook from current projections.

Stock selection remains the key. We would recommend that investors stay selective - with consumer, healthcare, REITs, land transport and offshore & marine as our preferred sectors. Below are our Top Picks for:

i. Sustained earningsgrowth outlook – $DairyFarm USD(D01) for its recent efforts to improve operating efficiencies and enhance margins. $CityDev(C09) for its asset monetisation ability, nimble capital management and continuing acquisition potential. $ComfortDelGro(C52) for its ability to grow its well-diversified business despite rising competition from Uber/Grab, as well for its gradually increasing dividend payout.

ii. Probable themes for 2017 – $Keppel Corp(BN4) as a play on recovery in oil prices in 2017. $Raffles Medical(BSL) for strong earnings growth in 2017, aided by higher contribution from Holland V and completion of its hospital extension.

iii. REITs – $CapitaCom Trust(C61U) for its resilient office sector portfolio that can weather the near-term sector headwinds. $ManulifeReit USD(BTOU) as a proxy to the rebounding US economy and strengthening USD.

iv. Quality small-cap names – $Spackman(40E) and $SingMedical(5OT) for strong and almost certain earnings growth potential.

End-2017 index target of 3,010. We derive our FSSTI index target based on a P/E multiple on 2017F EPS. Amidst the lack of strong re-rating catalysts, we value the FSSTI based on forward P/E of 14x, which is in line with the historical average P/E of 13.9x and also where the index is trading right now. Our index target of 3,010 for end-2017 offers 4.5% return. Including a 3.9% dividend yield for the market, this implies a total shareholder return of 8.4% in 2017F.

More...

<< Get the detail in-depth report (bumper issue 2017 stock picks) by logging into your RHB Invest account at www.rhbinvest.com.sg >>

Read more
About Contact Privacy Terms Widgets Store

There are more for you ...

View more and participate in our discussion now. It's FREE.

Creating an account means you’re okay with InvestingNote's Terms and Conditions