DBS Group Research analyst Rachel Tan has kept “buy” on Raffles Medical Group with a raised target price of $1.81 from $1.48.

The higher sum-of-the-parts target price took into consideration the historical mean price-to-earnings (P/E) of 34.5 times to FY2022 earnings, plus 20 cents per share for the group’s China hospitals.


See: Imminent reopening of borders brings opportunities for Raffles Medical : RHB


According to Tan’s calculations, her historical mean starts from FY2012.

In her report on Oct 12, Tan estimates that the group’s earnings for the FY2022 to FY2023 could achieve record highs due to the strong Covid-19-related services, recovery of elective procedures and foreign patients.

To this end, Raffles Medical Group, being the largest Covid-19 service provider and key PCR test provider at Changi Airport, is the biggest beneficiary for the pent-up demand for travel with the border relaxations.

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The group also stands to benefit from the recovery of elective procedures and the return of medical tourism to Singapore.

That said, Tan acknowledges that her FY2021 to FY2023 earnings estimates are one of the highest among the brokerages who cover the counter.

This comes as she expects contribution from Covid-19-related services to “surprise on the upside”.


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As at 3.57pm, shares in Raffles Medical are trading 2 cents higher or 1.31% up at $1.55, or an FY2021 P/B of 2.9 times.

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