Raffles Medical

Raffles Medical: Religare reiterates its Hold rating and TP $2.46. Says recent checks with several healthcare players in Singapore find that the next few months should be eventful for Singapore's private hospitals. Notes the pending opening of ParkwayHealth's Mount Elizabeth Novena Hospital will increase the nation’s private hospital bed capacity by roughly 22%, vs private hospital admissions growth of 4.1% YTD. Its checks indicate that this event poses significant risk for Parkway and an opportunity for Raffles longer term. While this plays out, the house continues to prefer Thai hospital operator Bangkok Chain Hospital (KH TB; TP Bt8.70).

Religare believes Raffles poised to benefit from any Parkway errors. Says Raffles' planned specialist medical center at the Thong Sia Building could gain doctors disgruntled with Parkway. It’s model assumes that the centre opens in 2013 and achieves revenue of $30m by 2016. Says turmoil at Mount Elizabeth could lead to a faster ramp-up. The house assumes that Raffles Hospital's revenue growth decelerates to +10.0% in
2012 from 2011's +14.9%.