- Upgrade to BUY with a slightly higher Raffles Medical's target price of S$1.03 (LTG: 1.0%, COE: 7.5%) as we roll forward our DCF-based valuation to FY25E.
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2H24 results in line.
- Raffles Medical’s 2H24 PATMI of S$31.6m (+4.3% y-o-y or +38% if exclude Fair Value gain from investment properties last year) was in line with ours but marginally below consensus. This brought FY24 earnings to S$62.2m (-31% y-o-y), which represents 100%/95% of MIBG/street’s full year estimates.
Core healthcare & insurance improved in 2H24.
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- Despite a challenging insurance industry amid persistent medical inflation, we note its insurance arm (RHI) managed to stay afloat in 2H through more diligent claims adjudication and careful cost management.
- Looking ahead, Raffles Medical will review its offering of medical services to both corporate clients in Singapore and offshore patients. New initiatives may include expanding its telemedicine services, as well as realigning/repositioning existing services to respond to the growing demand for wellness services.
China hospitals likely to breakeven in FY26.
- Read more at SGinvestors.io.
