Raffles Medical - Maybank Research 2024-07-29: Uneven Road To Recovery

• Raffles Medical (SGX:BSL)’s 1H24 PATMI of S$30.6m (-48.8% y-o-y, +1.1% h-o-h) came in below our and market expectations at 43.8%/41.1% of MIBG/consensus’ full year estimates.
• Notably, the bottom-line was hit by a decline in other operating income due to lower government grants, as well as higher insurance service expenses with the adoption of a new accounting rule for insurance contracts.

1H24 results below; Core hospital services the only bright spot

• - Read this at SGinvestors.io -
• Raffles Medical will now focus on growing and consolidating its three existing hospitals in China. For 1H24, China operations turnover grew 5.9% y-o-y to S$30.5m along with stronger patient loads. While still in the developmental phase, management believes that the Shanghai and Chongqing hospitals are on track to reduce gestational losses as utilisation rates continue to improve.

Insurance unit looks to stay challenging

• - Read this at SGinvestors.io -
• Raffles Medical’s insurance arm grew its topline by 28.8% y-o-y to S$84.4m in 1H24, while higher claims and a higher loss ratio were generally in line with industry trends.
• As certain insurance expenditure now needs to be recognised upfront instead of over the life of each respective contract, the segment’s non-cash operating loss further widened to S$6.4m versus S$1.3m a year ago.

Exploring overseas markets for growth

• Read more at SGinvestors.io.

Eric Ong Maybank Research | https://www.maybank-ke.com.sg/ 2024-07-29 SGinvestors.io

---