Raffles Medical Group

Raffles Medical Group

Postby winston » Tue May 20, 2008 4:42 pm

Raffles Medical Group (RMG SP)
Increased volume of local and international patients

Boost from implementation of means testing.

Raffles Hospital benefits from the implementation of means testing at restructured government hospitals from Jan 09 as local patients accounts for two- third of its admissions. Subsidies for “high-income” patients earning S$5,201 and above per month will be reduced to 65% for Class C wards (current: 80%) and 50% for Class B2 wards (current:65%).

This will reduce the pricing differential between government hospitals and private hospitals, resulting in more high-income patients seeking treatments at private hospitals.

Raffles Hospital plans to add another 50 beds in 2008, bringing the total to 250 beds, to cater to increased demand from local and international patients.

Reiterate BUY. We like RMG for the growth momentum at Raffles Hospital. Raffles Hospital will benefit from the influx of foreign patients, increase in revenue intensity and positive impact from economies of scale. Our target price of S$2.27 is based on a three-stage discounted cash flow model.
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Re: Raffles Medical Group

Postby kennynah » Tue May 20, 2008 6:10 pm

<<three-stage discounted cash flow model.>>

can teach me this? thanks
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Re: Raffles Medical Group

Postby helios » Tue May 20, 2008 9:44 pm

3-stage discounted model? big jurgon word some analysts will throw into e waters ...

(i) influx of foreign patients => yes in terms of medical travel, their japanese specialist clinic is shaping well;
(ii) increase in revenue intensity => increased demands for more beds? did not say which beds they r topping up to calculate e "intensity" ... usu. hospitals lack B2 wards;
(iii) positive impact from economies of scale => cheam ... inpatient or outpatient streams?
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Re: Raffles Medical Group

Postby winston » Tue Jun 10, 2008 4:29 pm

Not vested. From DMG:-

Strong earnings growth. Raffles Medical Group (RMG) has consistently recorded growth in both topline and bottomline over the past 4 years. Revenue grew at the rate of 14.2% CAGR, while net profit increased by 45.7% CAGR.

Now that RMG has full ownership of its hospital, we believe RMG would be able to enhance the services it offers to patients and continue to grow earnings. Riding on the medical tourism boom. Singapore is positioning itself as a medical tourism hub, attracting about 200,000 international patients every year.

The government’s aims to achieve serving 1m international patients each year, by 2010. Currently, about one-third of RMG’s patient load is foreigners. RMG intends to continue with its marketing efforts, through its Raffles International Patient Centre, to attract more foreign patients to its clinics and hospitals.

Beyond basic health. Besides basic health services, RMG also offers a range of lifestyle and wellness services, ranging from aesthetics to dental services. It has also developed its line of health supplements, which are being sold in regional markets such as Hong Kong, Malaysia and Indonesia. As more people look towards attaining a healthy lifestyle, this area would be another growth driver for RMG.

Means-testing could drive demand for private healthcare srvices. The introduction of means-testing in determining healthcare subsidies is likely to encourage patients to move over to private healthcare providers. This would increase the demand for healthcare services offered by RMG, and contribute to its growth.

We recommend BUY. RMG has been returning steady dividends to investors. With a wider range of medical services on offer, we expect patient load to grow, and revenue growth to continue. Its peers are currently trading at 29x FY08 earnings. We have a target price of S$1.69, based on 26x blended FY08/09 earnings. We recommend BUY, for a defensive stock and stable earnings.
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Re: Raffles Medical Group

Postby winston » Mon Jul 28, 2008 8:50 am

Not vested.

Raffles Medical Group's net profit halved to S$7.7 million ($5.7 million) for the second quarter ended June 30 2008, from S$15.8 million a year ago. This was due to a fair value gain of an investment property and its associated deferred tax charge.
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Raffles Medical Group - Analyst DBS

Postby ishak » Tue Sep 09, 2008 4:39 pm

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Re: Raffles Medical Group

Postby sidney » Tue Sep 09, 2008 8:55 pm

Kenny, i think 3 stage discount modelling refers to discounting the interest by 3 different stages to get its intrinsic value. For example, analyst may be using say 12% as the discount factor for year 2008 ~ 2010 when it was growing fast and finding its niche, then 10% from 2010 ~ 2013 for approaching maturity and then 2013 ~ infinite year at 7% when co. has finally stablised and is expected to just grow at its normal pace forever. This is the general concept. My maths sucks, so i cannot explain on the formulae.. heehee. As for reference, i think in textbk its called with "temporary supernormal growth."

Why different discount rates? Part of the answers can be explained by San e.g. (i) influx of foreign patients; (ii) increase in revenue intensity; (iii) positive impact from economies of scale
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Re: Raffles Medical Group

Postby millionairemind » Thu Oct 30, 2008 9:35 pm

October 30, 2008, 12.03 pm (Singapore time)

Raffles Medical Q3 profit rises 25%

By WONG WEI KONG

Raffles Medical Group announced on Thursday a net profit of $8.19 million for Q3 2008, up 25 per cent from a year ago.

Revenue in the third quarter rose 17 per cent to $51.3 million.

All divisions continued to contribute positively to the growth of the group. Revenue from healthcare services and hospital services divisions increased by 17.1 per cent and 16.9 per cent respectively.

However, net profit for the 9 months ended Sept 30 2008 decreased by 16.7 per cent because of the fair value gain of an investment property and its associated deferred tax charge in Q2 2007.
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Re: Raffles Medical Group

Postby LenaHuat » Fri Oct 31, 2008 1:14 pm

Watched Dr Loo on CNBC this morning. He said Indonesian patients only constitute some 20-25% of his customer base. The balance, some 100 countries ( :!: ) include Russian, Thai and Indian patients. This is inspite of India being 50% cheaper than Thailand, and Thailand being 35% cheaper than Singapore.
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Re: Raffles Medical Group

Postby winston » Wed Dec 24, 2008 10:01 pm

Not vested. From DBS:-

Steady ship in 2009

While admissions are expected to slow in 2009, we still expect Raffles Med to return growth on both its Healthcare and Hospital divisions due to higher revenue intensity and outpatient services. We also expect operating margins to improve on management’s tighter rein on costs. Its healthy balance sheet will see it through this period of uncertainty. It is trading at its
historical low valuation of c. 10x. Maintain BUY.

Slower admissions factored in.
While admissions could slow in the face of economic uncertainty, we have already taken this into account in our earlier report on 31 Oct, when we trimmed FY09F earnings by 6.6%. We see improvement in its operating margins from FY08, as we believe management will keep a tighter rein on costs.

Healthy balance sheet and net cash position. As of 9M08, the Group is in a net cash position of more than S$9m. Based on our estimates, this should increase to c.S$16m by the end of 2008.

Reiterate Buy on low valuations. We still like Raffles Medical, given that it is trading at a historical low PE (c.10x) and has healthy cashflow and balance sheet. We have factored in assumptions of slower admissions growth but due to its operating leverage, we still expect a CAGR growth of c.14% from FY08F – FY10F.

Maintain Buy on valuation grounds (at historical low PE of 10x), no significant capex needs and its net cash position. TP remains at S$0.76, 12x on FY09F earnings.
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