Dr Loo Choon Yong, executive chairman of Raffles Medical Group, has increased his total stake in the regional private healthcare provider and hospital operator.
On March 1 and 2, he acquired 750,000 shares on both days, at around $1.17 each. This brings his direct stake to nearly 199.1 million shares, or 10.678%.
Before this transaction, Loo had made purchases on Feb 24 and Feb 25 as well, snapping up a total of two million shares at prices ranging from $1.1867 to $1.19. Loo also holds a deemed stake of another 783.8 million shares.
With the March 2 purchase, Loo has a total interest of nearly 982.9 million shares or 52.726%, up from 52.686% previously.
Meanwhile, Loo’s daughter, Dr Sarah Lu Qinghui, who is an executive and non-independent director of Raffles Medical, also acquired some shares recently. On Feb 24, she acquired 1.5 million shares at $1.18 each, bringing her total stake to just over 62.8 million shares or 3.365% from 3.285% previously.
Besides acquisitions by these two directors, Raffles Medical Group bought back shares recently as well. Most recently on March 3, it had acquired 600,000 shares at between $1.15 and $1.16 each. This brings the total number acquired under the current mandate to around 9.38 million shares.
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The company had earlier bought on Feb 23, 24, Feb 28, March 1 and March 2. It paid between $1.15 and $1.22 for the 5.5 million shares bought on these days.
On Feb 21, Raffles Medical reported earnings of $44.7 million for 2HFY2021 ended Dec 31, 2021, down 8.1% from $48.6 million in 2HFY2020. However, its full-year earnings for FY2021 rose 27.7% to $84.2 million. The company attributes the better numbers to the provision of pandemic-related testing and vaccination services.
However, some analysts are cautioning that going forward, the lift provided by the earnings from pandemic-related services might ease off.
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On the other hand, Raffles Medical might enjoy growth elsewhere. In FY2021, its businesses in China accounted for 7% of its total revenue and RHB analyst Shekhar Jaiswal sees a steady ramp-up in the second half of the current FY2022. He describes this as a “transition year” “as the decline in Covid-19-related revenue should be partially offset by higher hospital revenue”.
Growth momentum resumes
Defence and engineering company ST Engineering bought back some shares on the same day it reported its FY2021 earnings. On Feb 25, the company reported earnings of $274.4 million for the 2HFY2021 ended Dec 31, 2021, up 3.8% y-o-y over $264.4 million reported for 2HFY2020. Revenue for 2HFY2021 was up 12.7% to $4.04 billion from year ago.
Later in the day, it paid $3.78 each for 500,000 shares. This brings the total bought back under the current mandate to 8.8 million shares.
For Vincent Chong, the company’s group president and CEO, the FY2021 numbers was a “good set of results” where there was broad based growth despite the pandemic.
“This reflects the underlying strengths of our businesses and our people. The proposed TransCore acquisition demonstrates our readiness to seize growth opportunities to emerge stronger post pandemic,” says Chong, referring to the ongoing US$2.7 billion ($3.7 billion) acquisition of a US traffic management company. “We can look to the future with confidence as our order book of $19.3 billion is very robust,” he adds.
For 2HFY2021, the company plans to maintain a final dividend of 10 cents, bringing FY2021 total to 15 cents. Going forward, ST Engineering plans to pay a quarterly dividend of four cents, bringing FY2022 total to 16 cents. The company says the higher dividend distribution frequency will give its shareholders a steadier stream of income.
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In their Feb 28 report, DBS Group Research analysts Suvro Sarkar and Jason Sum describe ST Engineering’s growth trajectory as having become “more exciting”. Besides keeping their “buy” call, they have raised their target price to $4.70 from $4.60. The analysts are projecting a “solid” 10% CAGR in its earnings from FY2021 to FY2023, led by acquisitions plus recovery in the commercial aerospace segment, which has been hit by the pandemic.
“However, the big story is that instead of revenue stagnation (seen between FY2012 and FY2018), growth momentum will continue, built on the solid foundation established since 2018.
“With continued investments in R&D and strategic acquisitions, STE remains well on top of crucial global needs of digitalisation, urbanisation, sustainability, and security, driving robust organic growth across segments of 4-5% even further out to 2026,” the DBS analysts add.
