RafflesMG - OCBC initiates 'hold' for Raffles Medical

Stock Name: RafflesMG
Company Name: RAFFLES MEDICAL GROUP LTD
Research House: OCBC

OCBC Investment Research has initiated coverage of Singapore healthcare provider Raffles Medical Group <RAFG.SI> with a “hold“ rating and a target price of $2.32. 

OCBC Investment Research said that while it is positive on Raffles Medical’s growth prospects, its cost management and operating efficiency, as well as the outlook for healthcare providers, most of the positive factors have been priced in. 

The brokerage said that Raffles Medical has traded at a premium to its peers historically and this may continue due to the firm’s consistent earnings profile and expected margin expansions. 

“The increase in depth and breadth of specialties, coupled with the recruitment of more specialists, will likely provide further upside to margins in the future’, OCBC said in a report.     

OCBC valued Raffles Medical at 24 times price-earnings ratio (PER) for its 2011 financial year, in line with its historical average PER since listing. The brokerage will turn buyers of the stock at $2.10 or lower, it added. 

At 0134 GMT, shares of Raffles Medical were up 0.4% at $2.33 on a volume of 40,000 shares.