UOB Kay Hian analyst Llelleythan Tan maintained a Buy rating on Raffles Medical Group yesterday and set a price target of S$1.18.
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Llelleythan Tan has given his Buy rating due to a combination of factors influencing Raffles Medical Group’s performance. Despite challenges such as rising manpower costs due to intense competition for nurses and a strong Singapore dollar affecting hospital services, the company is expected to maintain steady earnings growth. The domestic hospital segment faces a challenging outlook, but the group’s Chinese operations are anticipated to improve significantly as patient loads increase.
Raffles Medical Group’s Chinese hospitals, particularly in Chongqing and Shanghai, are expected to contribute more significantly to the company’s revenue, driven by an increase in patient visits and the implementation of China’s national health insurance program. Additionally, while foreign patient levels remain muted due to regional competition, potential revenue growth could arise from price adjustments and cost efficiencies at Raffles Hospital Singapore. These factors collectively support the Buy rating, with a higher target price set at S$1.18.