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31-10-2010, 09:06 AM
With the spotlight trained on medical groups (e.g. Parkway and Thomson Medical) recently, it is perhaps timely to look at the other major player in Singapore.
RMG's share price has also rebounded nicely form the low of 50+ cents during the worst of the financial crisis. With:
(1) a strong balance sheet and net cash of $70.9 million (13.5c/share), (2) a good record of cashflow,
(3) a varied offering of medical services catering to the wealthy in the region (check up their website) and
(4) future expansion of Raffles Hospital (additional capex of $80 million to $100 million funded from internal resources)
is there still value at the last traded price of $2.18/share? Current valuation does seem rich. However, it is a good business to own given that there will always be demand for its services and its profit margins are also decent. Any views?
RMG's share price has also rebounded nicely form the low of 50+ cents during the worst of the financial crisis. With:
(1) a strong balance sheet and net cash of $70.9 million (13.5c/share), (2) a good record of cashflow,
(3) a varied offering of medical services catering to the wealthy in the region (check up their website) and
(4) future expansion of Raffles Hospital (additional capex of $80 million to $100 million funded from internal resources)
is there still value at the last traded price of $2.18/share? Current valuation does seem rich. However, it is a good business to own given that there will always be demand for its services and its profit margins are also decent. Any views?