Raffles Medical Group - RHB Invest 2023-03-24: Revenue From COVID-19 Facilities Post Pandemic

• Raffles Medical (SGX:BSL) operates a transitional care facility (TCF), which we believe assisted it in reporting strong healthcare revenue in 2H22 despite phasing out COVID-19-related services.
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• We remain positive on Raffles Medical’s long-term growth, which is dependent on its China operations generating profit. Its forward P/E remains compelling vs regional peers.

Singapore public hospitals are running at almost full capacity.

• Public hospital bed occupancy has risen from a pre-COVID-19 level of 87.6% in 2019 to 93.1% in 2022. This is largely due to the higher number of older patients with complex conditions who require longer hospital stays.
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TCF will be retained as a key part of Singapore’s healthcare system.

• Transitional care facilities (TCFs) are for medically stable patients from public hospitals waiting for long-term care arrangements, such as home or nursing home care. During the pandemic, TCFs helped strengthen Singapore’s hospital capacity.
• Singapore had set up 500 TCF beds in 5 sites, and they were run by private operators. Raffles Medical currently operates a TCF at the Changi Expo.
• Singapore's Health Minister, Ong Ye Kung, said that the TCFs set up during the pandemic to prevent hospitals from being overwhelmed have proven so valuable that they will be retained as a key part of Singapore’s healthcare system. As Singapore plans to expand the TCF presence in the city-state, we believe Raffles Medical could continue operating its TCF beyond Jun 2023.

Unchanged long term investment thesis for Raffles Medical

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Shekhar Jaiswal RHB Securities Research | https://www.rhbgroup.com/ 2023-03-24 SGinvestors.io

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