Broker: CGS International
Date of Report: July 28, 2026
Excerpt from CGS International report.
Report Summary
- Stock: Raffles Medical Group (RFMD SP)
- Action: Downgrade to Hold (from Add)
- Target Price: S\$0.95 (lowered from S\$1.20)
- Current Price: S\$0.91
Key Highlights:
- Main Reason for Downgrade: 1H26 net profit of S\$29.0m missed expectations, forming only ~40% of full-year estimates. Revenue from healthcare services fell 17.2% year-on-year due to increased public hospital capacity (notably Woodlands General Hospital), which drew patients away from Raffles’ transitional care facility.
- Insurance Revenue: Declined 6.7% year-on-year, but segment losses narrowed thanks to insurance premium repricing.
- Regulatory Pressure: Recent changes to Integrated Shield Plans (ISPs) could structurally lower private healthcare demand as higher out-of-pocket costs push patients towards public healthcare options.
- Growth Outlook: Limited domestic growth catalysts. Overseas business (mainly China) is not expected to achieve EBITDA breakeven until end FY27. A pending acquisition in Vietnam may provide future upside but is not yet completed.
- Earnings Revisions: FY26F-28F EPS cut by 13.7%-14.1% to reflect lower Singapore revenues, leading to the reduced target price and Hold call.
- Upside Risks: Potential special dividend in 2H26F (for 50th anniversary), completion of Vietnam hospital acquisition.
- Downside Risks: Delay in China operations breakeven, further revenue decline in healthcare services.
Peer Comparison: Raffles Medical Group trades at a forward P/E of 26.7x (CY26F), higher than regional peers, justifying a cautious stance given muted near-term growth and regulatory headwinds.
Actionable Insight: Investors are advised to Hold Raffles Medical Group at current levels, with limited upside (target price S\$0.95) and lack of near-term growth drivers. Monitor for potential dividend or successful overseas expansion as possible positive catalysts.
Above is an excerpt from a report by CGS International. Clients of CGS International can access the full research report from the broker’s website.
