SINGAPORE (Nov 23): OCBC has upgraded its call on Raffles Medical Group to “buy” with an unchanged target price of $4.59, following the stock’s recent correction caused by lower-than-expected growth in 3Q earnings.

During the quarter, PATMI increased by just 1.2%, as higher staff and depreciation costs kicked in on the back of the company’s expanded scope of activities. The company’s management has indicated it will keep its focus on operational efficiency.

While Raffles Medical Group saw fewer foreign patients, those who sought treatment were “higher intensity” cases such those requiring bone marrow transplant. “Thus, while there is the risk of some patients choosing other hospitals for cheaper cost of treatment, we note that Raffles Medical Group still serves a premium segment of patients, and such specialised treatments enable them to remain a strong contender against their regional competitors,” states OCBC.

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