Wednesday, July 29, 2015

Raffles Medical

Raffles Medical: Downgraded by CLSA after earnings missed as staff costs grew 9.4%, outpacing revenue growth of 7.2%.

Management remains confident for 2H15 as the Shaw Centre medical centre starts to contribute while China expansion plans are on track with Shenzhen and Beijing being key targeted cities.

While earnings estimates are raised by 4-9% over the next two years on the China hospital business, execution risks remain key given past experience.

CLSA raised its TP to $4.90 from $4.12 but sees limited upside.

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