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Imminent reopening of borders brings opportunities for Raffles Medical : RHB

Amala Balakrishner
Amala Balakrishner9/21/2021 05:30 PM GMT+08  • 2 min read
Imminent reopening of borders brings opportunities for Raffles Medical : RHB
RHB Group Research is maintaining its ‘buy’ call and target price of $1.45 on Raffles Medical, at a 4% upside
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RHB Group Research is maintaining its ‘buy’ call and target price of $1.45 on Raffles Medical Group. This is expected to give the counter a 4% upside from its $1.39 price, analyst Shekhar Jaiswal writes in a Sep 21 note.

His move comes despite the tapering of the vaccination programme in Singapore.

“This would lead to lower 2H2021 revenue for its healthcare business,” notes Jaiswal.

Raffles Medical operates 14 vaccination centres, compared to 15 previously.

See also: Analysts mixed on Raffles Medical even as it appears immunised to the Covid-19 bug

The way Jaiswal sees it, the drop in revenue should be partially offset as the government looks to treat Covid-19 as endemic and gradually reopens borders.

With this the healthcare provider is expected to benefit from a gradual return of patients to clinics as well as the entry of foreign patients, notes Jaiswal.

He adds that the group stands to gain from being the exclusive healthcare service provider at Changi Airport as well as the sole provider of Covid-19 polymerase chain reaction (PCR) tests for air travelers into Singapore.

The group also administers Covid-19 PCR tests on the third and seventh day of a visitor’s arrival.

As Singapore looks to treat the coronavirus as endemic, Jaiswal expects Covid-19 PCR tests to be done more frequently at workplaces.

This, he says, will supplement the antigen tests which tend to be less accurate.

Meanwhile, the group’s earnings are slated to get a lift in from its Chongqing Hospital in FY2022 which is penciled to breakeven in terms of EBITDA (earnings before interest, taxes, depreciation and ammortisation).

For now, the group is also actively supporting the health ministry’s efforts in coping with Covid-19.

For one, it is operating a community care facility (CCF) with 50 beds at the Singapore Expo’s [email protected]

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Set up by the health ministry, CCFs serve to augment the capacity of hospitals. These facilities cater to Covid-19 patients who are generally well, but have underlying health conditions that require close monitoring.

Shares in Raffles Medical closed up a cent or 0.72% at $1.40 on Sep 21.

Cover image: Raffles Medical

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