Following a share price correction, Maybank Kim Eng Research analyst Lai Gene Lih has upgraded Raffles Medical Group to “buy” on improved risk-reward. Lai’s target price on the medical services provider, however, remains unchanged at 99 cents.

“RMG’s key sustainability factor is ensuring patient safety and regulatory compliance. Raffles Hospital Singapore (RHS) is also JCI accredited since 2008, underscoring its commitment to patient safety and quality healthcare. RMG also places strong emphasis on employee welfare and diversity. Key risk is slower than expected recovery of foreign patient volumes,” writes Lai in a report dated Sept 30.

See: Raffles Medical might have gone regional but Covid war brings it back to the homefront

RMG faces data security risks and have procedures in place to protect data, including customers’ information. There was no incident of leak, theft or loss of customer data in 2019, notes Lai.

Lai highlights RMG’s commitment to workplace diversity, as it sees this as an advantage in catering to the various markets and patient groups in terms of communication and local knowledge. RMG formed a Talent Management Board in 2019 to oversee leadership development and succession planning at the group level. RHS’ customer satisfaction index improved slightly to 75.5 in 2019, from 75.1 the year before. 

While stakeholders tend to see environmental aspects as low priority, RMG views it as a medium priority, says Lai. Its energy and water consumption indexes improved in 2019 from 2018 due to continual conservation efforts. Practical measures include using smart meters and water-efficient fittings. RHS received the Green Mark certification from the Building and Construction Authority in 2019.

Earlier this year, Raffles Medical posted a 38.2% drop in 1H2020 earnings, but expects to "remain profitable" this year. 

Looking at Raffles Medical’s 1H2020 performance, executive chairman Loo Choon Yong said the company has “remained resilient”.

“Our strategic investment in technology, together with our experience from managing SARS, H1N1 and MERS, have helped us improve our protocols and operations for care during epidemics. This has enabled us to respond with agility and flexibility while continuing to provide quality care during this pandemic”.

As at 12.57pm, shares in Raffles Medical are trading at 0.5 cents lower, or 0.62% down, at 80.5 cents.