The research house’s price target estimate, however, has been lowered to $1.54 from $1.67 previously after accounting for greater expansion risks in China given higher execution risks for its Shanghai and Chongqing hospitals, both firsts for the group outside of Singapore; higher-than-expected start-up costs in major expansion markets; and the potential of a continued structural decline of medical tourism Singapore.
SINGAPORE (June 5): Maybank Kim Eng Research continues to rate Raffles Medical Group (RMG) at “buy” as Singapore’s leading integrated healthcare provider, with a “robust track record and exciting development plans” of two hospitals in China.
In a Monday report, analyst John Cheong says he finds the shares of RMG undervalued as it is trading at 32 times FY17 P/E – with its current stock price largely reflecting solely the Singapore operations, without fully accounting for its new hospitals in China.
