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
Target Price: S$0.95 (reduced from S$1.20)
Current Price: S$0.91
Key Call to Action: Hold; limited near-term catalysts and lowered earnings outlook.
Key Highlights:
- 1H26 net profit of S\$29.0m missed expectations, reaching only around 40% of full-year estimates, mainly due to lower healthcare services revenue.
- Healthcare services revenue fell 17.2% year-on-year as public hospital bed capacity expansion drew demand away from Raffles Medical’s transitional care facility (TCF).
- Insurance services revenue declined 6.7% year-on-year, but losses in this segment narrowed due to premium repricing.
- Revisions to Singapore’s Integrated Shield Plans (ISPs) may structurally reduce demand for private healthcare, posing a further risk to revenue.
- Overseas business (notably China) is expected to achieve EBITDA breakeven only by end-FY27F; the acquisition of American International Hospital in Vietnam remains pending.
- FY26F-28F EPS estimates were cut by 13.7-14.1% to reflect lower domestic revenues and limited earnings growth prospects.
- Valuation revised down to 11x FY27F EV/EBITDA from 13x, reflecting weaker outlook.
- Upside risks: Potential special dividend for RFMD’s 50th anniversary, and earnings upside if the Vietnam hospital acquisition is completed.
- Downside risks: Further delays in China breakeven or deeper decline in Singapore healthcare services revenue.
Summary Table:
- Recommendation: Hold
- Target Price: S\$0.95
- Key Risk: Weak domestic growth, regulatory changes, overseas turnaround delays
- Possible Upside: Special dividend, Vietnam expansion
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: CGS International research website
