Company Coverage
Raffles Medical Group (RFMD SP) 1H26: Lower TCF Occupancy Drives Earnings Miss And Resets The Run Rate
HOLD (Downgraded)
Current price:
Target price:
Upside:
Previous TP :
S$0.91
S$0.94
3.3%
S$1.25
Analyst
Highlights
- 1H26 net profit of S$29.0m (-9.6% yoy) missed expectations; the miss was due to lower occupancy of its Singapore TCF. Excluding the TCF, the rest of RMG’s business lines recorded yoy stable/improving performance in 1H26.
- 1H26 earnings are likely to have set a new baseline run rate moving forward.
- The turnaround of the China hospital portfolio remains on track.
- Downgrade to HOLD, with our target price cut to S$0.94, now based on 27.2x
2027F PE (0.5SD below historical mean PE of 29.6x).
Analysis
- 1H26 results a miss... Raffles Medical Group’s (RMG) 1H26 reported net profit of S$29.0m (-9.6% yoy) missed expectations, forming 40% of our fullyear forecast. Excluding one-off items such as forex gains, core net profit dropped 18.7% yoy to S$26.4m.
- …due to lower occupancy at its TCF. Revenue and PBT of the healthcare services division dropped 17.2% and 37.5% yoy, respectively, driven by lower bed occupancy at RMG’s transitional care facility (TCF) in Singapore, which has seen patient traffic diversion to the newly opened Woodlands Hospital.
Highlights
- 1H26 net profit of S$29.0m (-9.6% yoy) missed expectations; the miss was due to lower occupancy of its Singapore TCF. Excluding the TCF, the rest of RMG’s business lines recorded yoy stable/improving performance in 1H26.
- 1H26 earnings are likely to have set a new baseline run rate moving forward.
- The turnaround of the China hospital portfolio remains on track.
- Downgrade to HOLD, with our target price cut to S$0.94, now based on 27.2x
2027F PE (0.5SD below historical mean PE of 29.6x).
Analysis
- 1H26 results a miss... Raffles Medical Group’s (RMG) 1H26 reported net profit of S$29.0m (-9.6% yoy) missed expectations, forming 40% of our fullyear forecast. Excluding one-off items such as forex gains, core net profit dropped 18.7% yoy to S$26.4m.
- …due to lower occupancy at its TCF. Revenue and PBT of the healthcare services division dropped 17.2% and 37.5% yoy, respectively, driven by lower bed occupancy at RMG’s transitional care facility (TCF) in Singapore, which has seen patient traffic diversion to the newly opened Woodlands Hospital.
HOLD (Downgraded)
Current price:
Target price:
Upside:
Previous TP :
S$0.91
S$0.94
3.3%
S$1.25
Analyst
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