Raffles Med

Raffles Med: Daiwa initiates, and sees a compelling medium-term earnings growth story, on the back of its hospital expansion plans in Singapore and planned foray into China. RMG’s China market potential is perhaps under-appreciated by investors given its preliminary nature of its plans. Daiwa’s rough estimates suggest 2015-18 EPS CAGR could be ~26% as a result. Valuations might be the key trigger, says Daiwa, as RMG is trading ~FY14e P/E of 25.7x, a 12% discount to regional peers. The house thinks this is justified, on its defensive nature, net cash position, execution track record and relative scarcity of quality healthcare plays. Catalysts cited are the revealing of both China and Singapore expansion plans, which will paint clarity for investors. Daiwa has a an O/PF with TP $3.68