Raffles Medical Group: Announced good set of 3Q11 results which was in-line. Rev at $69.1m, +13.5% yoy and +3.4% qoq, while Net Income at $11.8m, +10.3% yoy and +1.7% qoq.
All divisions contributed positively with Hospital Services and Healthcare Services divisions registering growth of 14.1% and 8.4% respectively. The improved performance was the result of continued improved operating efficiencies, coupled with new specialists, higher patient load and increased patient acuity.
Going forward, grp remains positive on outlook, nothing that planning and preparatory work for 2 projects announced previously - the expansion of Raffles Hospital by 102,408 sqft, and the Specialist Medical Centre at Bideford Road – is underway, while grp’s new clinic at Asia Square will give it a stronger foothold in the emerging downtown financial district. Also expect to benefit from recent govt initiatives such as the expanded Primary Care Partnership Scheme (PCPS), which envisages more subsidised patients being treated by private general practitioners.
We note that at current price, balance sheet remains strong, with grp in a net cash position of $8.8m, while at current price, grp trades at an annualized 26.3x FY11E P/E, which is still reasonable, given its scarcity premium in SG healthcare sector. Ratings as follow:
Kim Eng maintains Buy with $2.73 TP.
DBSV maintains Hold with $2.48 TP.
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