Raffles Medical Group’s 2Q16 revenue grew 19.8% YoY to S$119.0m as both the Healthcare and Hospital Services divisions saw their segment revenue increased 42.2% and 7.9%, respectively. This was driven by higher patient load, expansion of clinic network, increased contribution from more specialist consultants as well as from International SOS (MC Holdings) and its subsidiaries (MCH).

However, revenue growth was offset by higher costs such as staff costs due to staff recruitment for the new medical centre at Holland V. As a result, PATMI grew 4.5% to S$16.7m. A DPS of 0.5 S-cents was also declared. We are keeping our HOLD rating but place our fair value estimate of S$1.57 under review, pending more information from the analyst briefing later today.

Source: OCBC Research - 25 Jul 2016