RHB Group Research analyst Shekhar Jaiswal believes it is a good time for investors to buy Raffles Medical Group (RMG) shares in view of its recent share price weakness.
“[Raffles Medical’s] valuation looks compelling, especially amidst a sustained estimated earnings growth over the forecast period,” he remarks in a Nov 19 research note.
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He has maintained his “buy” call and target price of $1.65 for Raffles Medical Group, which implies an upside of nearly 20%. He notes that the target price implies a P/E ratio of 39 times over the company’s FY2022 ended December earnings.
The way Jaiswal sees it, it’s an opportune time for investors to buy into the company’s sustained earnings growth story which is underpinned by the increased use of Covid-19 testing as borders reopen, the normalisation of the group’s domestic healthcare and hospital business, and the return of medical tourism in Singapore.
In addition, he points out that Raffles Medical is banking on growth in China. Its Chongqing hospital is expected to break even in EBITDA terms in 2022, while its Shanghai hospital, which commenced operations early this year, is expected to break even in EBITDA terms in three years.
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As at 10.37am, shares in Raffles Medical are up 1 cent or 0.73% higher at $1.39.
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