Raffles Medical Group

Raffles Medical Group: Announced that its application for the change of use of its commercial podium at 30 Bideford Road for medical clinics has been unsuccessful. As a recap, RMG had announced on 21 Feb 2011 that it was purchasing a 7-storey commercial podium block of Thong Sia Building in the Orchard Road vicinity for S$92.08m, with the aim of establishing a new Specialist Centre there. The transaction has since been completed. RMG said that it intends to work with the relevant authorities to amend its plans in a bid to address their concerns. OCBC see this as a minor setback given that this would likely result in some delay to the original commencement plan of operations (previously highlighted as 1H13). No further details were provided regarding the reason for the application rejection, but remain optimistic that RMG would be able to work out a resolution with the authorities. Overall, maintain BUY rating and $2.82 fair value estimate on RMG for now as the group is slated to release its 3Q12 results next Monday (22 Oct) before the market open, and would provide more updates after the analyst briefing.