Raffles Medical - CGS-CIMB Research 2022-11-01: In The Pink Of Health

Raffles Medical - In The Pink Of Health

  • In its 3Q22 update, Raffles Medical (SGX:BSL) disclosed revenue and net profit of S$199.5m and S$38.3m, bringing 9M22 revenue and net profit to S$581.8m and S$98.2m respectively. 9M22 revenue was in line at 78% of our full-year estimates, but net profit exceeded our full-year estimates at 102% of our forecast. See Raffles Medical's announcements.
  • We believe this was on the back of stronger healthcare services, with higher patient visits to its outpatient GPs and specialist clinics alongside management of Connect@Changi, a step-down facility providing transitory care for both COVID and non-COVID patients, which likely allowed Raffles Medical to reap better operating leverage, translating to margin expansion from relatively lower staff costs, purchased and contracted services, as well as lower inventories and consumables.
  • We believe that the COVID-19 pandemic has led to a change in the underlying dynamics of healthcare services. With greater awareness of health risks, we believe there is a greater number of people seeking medical advice and/or help for a wider variety of illnesses. We believe Raffles Medical is likely to continue playing an outsized role in fulfilling the healthcare needs of the nation with its extensive network that provides primary, secondary as well as tertiary healthcare services.
  • We increase our FY22F EPS forecast for Raffles Medical by 22% to reflect slightly higher revenues from COVID-19-related services and better profitability profile for the rest of the year. We keep our FY23- 24F estimates unchanged on prudent assumptions that higher revenue intensities from COVID-19-related services such as management of Connect@Changi and Joint Testing and Vaccination Centres (JTVCs) could taper.
  • We reiterate our ADD call on Raffles Medical with an unchanged target price of S$1.60, pegged at 15x FY24F EV/EBITDA, or 0.5 standard deviation below its 5-year historical average to reflect a lower trading band over the past two years.

Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.

TAY Wee Kuang CGS-CIMB Research | https://www.cgs-cimb.com 2022-11-01

Previous report by CGS-CIMB:
2022-10-24 Raffles Medical Group - Not Stepping Down On COVID-19 Efforts.

Price targets by 3 other brokers at Raffles Medical Target Prices.
Listing of research reports at Raffles Medical Analyst Reports.

Relevant links:
Raffles Medical Share Price History,
Raffles Medical Announcements,
Raffles Medical Dividends & Corporate Actions,
Raffles Medical News Articles

SGX Stock / REIT Search


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