Raffles Medical Group Ltd – Sluggish growth February 25, 2026 17

PSR Recommendation: NEUTRAL Status: Maintained
Last Close Price: 1.07 Target Price: 1.02
  • FY25 revenue and PATMI were within expectations at 96%/97% of our FY25e estimates, respectively. 2H25 adjusted PATMI grew 4% YoY to S$36.4mn. Revenue in China and healthcare services contracted in 2H25. FY25 dividends rose 20% to 3 cents (84% payout).
  • Hospital services registered a 9% growth in revenue and profits in 2H25. Driving revenue was a combination of higher prices, insurance channelling more patients and corporate accounts.
  • We lower our FY26e PATMI by 8% to S$73mn. Our DCF target price of S$1.02 and NEUTRAL recommendation is maintained. Growth in Singapore is muted due to sluggish patient volumes. Price pressure from insurers and new government hospitals will be another headwind to raising patient bills. Losses in China are expected to narrow gradually. The lack of revenue momentum will cap the ability to scale up for operating leverage.  Raffles Medical continues to generate attractive free cash flows of S$105mn in FY25 with a net cash balance sheet of S$261mn.

 

 

 

 

 

 

 

 

 

 

The Positive
+ Rebound in hospital services. Hospital services grew 9% in PBT in 2H25 to S$23.4mn.
Several reasons were given for the growth – higher prices, new specialist offerings, insurance
channelling more patients and lumpy corporate accounts.
The Negative – Weaker China. Revenue weakness in China has accelerated with a 6.7% YoY decline in 2H25
(1H25 -1.9%). Attracting doctors will require time. More experienced specialists prefer
government hospitals that allow them to teach and conduct research. Raffles is working with
government teaching hospitals to allow specialists to practise several times a week. The
required scale and regularity are still lacking.

Outlook

We expect Raffles Medical to deliver lacklustre growth. Volumes are expected to be soft due
to reduced foreign patient volumes, new public hospitals, and price pressure from insurers.
China’s losses are expected to narrow, but the lack of revenue growth makes achieving the
break-even target harder. Raffles Medical has performed well in controlling expenses,
especially staff cost, and enjoys a strong net cash balance sheet of S$261mn with free cash
flow of S$105mn.

Maintain NEUTRAL with unchanged TP S$1.02

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About the author

Profile photo of Paul Chew

Paul Chew
Head of Research
Phillip Securities Research Pte Ltd

Paul has 20 years of experience as a fund manager and sell-side analyst. During his time as fund manager, he has managed multiple funds and mandates including capital guaranteed, dividend income, renewable energy, single country and regionally focused funds.

He graduated from Monash University and had completed both his Chartered Financial Analyst and Australian CPA programme.

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