Raffles Medical Group (RMG) reported its 2Q15 results, which was broadly in-line with expectations. Revenue rose 7.2% YoY to S$99.3m, forming 23.6% of our FY15 forecast. This was on the back of growth in both its healthcare services and hospital services by 5.7% and 6.6% respectively.

Due to the new and expanded operations at Raffles Hospital and its medical centre in Shaw Centre, higher staff costs and operating lease expenses incurred. As a result, PATMI was up 2.2% to S$16.0m, making up 21.9% of our full-year forecast. While 1H15 bottom-line constitutes about 42.5% of FY15F, 2H is usually the stronger period.

The group also declared a DPS of 1.5 S-cents, similar to last year. Maintain HOLD, while we place our fair value estimate of S$4.17 under review pending more information at the analyst briefing later this morning.

Source: OCBC Research - 27 Jul 2015