Raffles Medical Grp

Raffles Medical Grp: Annouced strong FY10 Results which were in-line, with Rev at a record $239.1m, +9.4% YoY, while Net Profit at $45.3m, +19.5%YoY. All divisions of the Group continued to contribute positively to the growth in rev, with Rev of Hospital Services and Healthcare Services divisions increasing 12.1% and 6.1% respectively…..

Higher patient load, wider range of medical specialties, continued improved operating
efficiencies and the recruitment of more specialist consultants contributed to the grp’s performance. Excluding the impact of jobs credit grants received by Grp and revaluation gains of investment property in FY09 and FY10, Net Profit would have grown by 22.9%....

Going forward, grp will continue its focus on quality and value-driven curative healthcare services, and tip Foreign patient load to increase, due to its well-diversified foreign patient base and growth in specialist staff and competencies. Also tip finalizing the design scheme for the 102,408 sqtft expansion of RafflesHospital and liaising with the authorities on the relevant submissions, with construction expected to commence in second half of this yr….

Grp’s balance sheet remains strong, with a healthy net cash position of $84.6m, due to continued strong operating cashflows generated by the Grp after distributing div of $15.7m in 2010. We note that at current price valuations appear compelling, with grp trading at 24.7x FY10 PE, vs Thomson’s Medical takeover PE offer of 32.2x