Report Summary

• Raffles Medical Group (RFMD) maintains a strong net cash position, enabling shareholder returns through share buybacks and potential special dividends, especially for its 50th anniversary in 2026.
• The company expects a return to year-on-year earnings growth in 2H25/FY25, following two years of decline, driven by improving China operations and the anticipated completion of its Vietnam hospital acquisition.
• RFMD’s overseas revenue remains limited, with China and Vietnam ventures yet to significantly contribute, but business diversification is expected to re-rate the stock post-acquisition.
• The target price is raised to S\$1.23 and the “Add” recommendation is reiterated, with re-rating catalysts including special dividends and regulatory approval for the Vietnam acquisition.
• Downside risks include continued losses in China hospitals and increased competition from regional peers, potentially impacting revenue.
• RFMD’s ESG score improved to B- in 2024, reflecting better social and environmental practices, though governance remains a relative weakness due to board composition.
• Compared to regional hospital peers, RFMD offers an attractive dividend yield and solid financial metrics, supporting its positive investment outlook.