Raffles Medical Group

[Dividend Warrior]

Their plan to have a hospital in Orchard Road was rejected twice by the authorities......

[Penguin Papa]

http://info.sgx.com/webcoranncatth.nsf/V...5003DEAFE/$file/RMG_Commercial_Property_Appointment_of_Property_Consultant_10Jun2013.pdf?openelement

After several rounds of rejections, they decide to sell it off. Wonder how much it can fetch.

[opmi]

Owners of cairnhill place would be interested. Can amalgate and redevt.
Too bad it is at the wrong side. Or else SPH would grab it.

But wonder the mosque has a veto in the redevt. I guess there is a mosque there before they sell to the cairnhill place developers.

[Penguin Papa]

[KopiKat]

In SGX Annc, selling for $118Mil...

[mkmk]

Financial Statement: http://infopub.sgx.com/FileOpen/RafflesM...eID=261330

Press Release: http://infopub.sgx.com/FileOpen/RafflesM...eID=261417

Highlights of Q3 2013 Performance
- Profit after tax grew 10.3% to S$14.0 million
- Group achieved 8.0% growth in revenue to S$85.1 million
- Revenue from Hospital Services Division increased by 9.4%
- Revenue from Healthcare Services Division grew 5.7%
- Healthy cash position of S$146.1 million

(not vested)

[yawnyawn]

RMG redeploying cash from sale of Thong Sia building to a commerical property in Holland V for SGD54.8m.

http://infopub.sgx.com/FileOpen/RMG_Acqu...eID=267817
http://research.maybank-ib.com/pdf/docum...3_5569.pdf

Extracts from Maybank's report,

A more expansive approach this time around. The acquired site has a land area of 1,942 sq m (20,907 sq ft), which RMG plans to redevelop into a five-storey commercial building with a total gross floor area of 62,720 sq ft. This redevelopment will cost an additional SGD65m for a total estimated outlay of SGD120m. Breakeven cost is estimated to be SGD1,913 psf.

Retail element to this acquisition. RMG intends to take 9,000 sq ft of space for its own use as outpatient medical and specialist clinics, with DBS Bank leasing 4,500 sq ft. This means a major part of this development will actually be leased to retail and F&B outlets. Although this move appears to be outside RMG’s core business, we believe the rationale is sound from an earnings perspective.


I did a quick calculation,
GFA left for retail & F&B will be 49,220 sqft. NLA (roughly 65% of GFA) should be around 32,000 sqft.Taking average rents for Other-City/Fringe market at $14.30 psf/month, RMG stands to receive property income of SGD5.49m p.a. i am unsure of the cost to manage the property and any misc fees, so valuebuddies here do provide inputs if possible

Average rent at Clementi Mall is at SGD15.50 psf/month and they are under-rented! About 13% below comparable malls with similar footfalls, such as Tampines Mall and Junction 8 where passing rentals are S$17.70-17.80psf pm. Therefore, my estimate should be pretty conservative.

With the recent URA masterplan to expand the Holland Village area, i suppose more people will be living in this area and that will be a plus point for RMG.

(in my watchlist)

[yawnyawn]

Nextinsight posted 2 articles on Raffles Medical Executive Chairman, Dr Loo Choon Yong which gives us an interesting insight on the character and mindset of the man himself.

Part 1 - http://www.nextinsight.net/index.php/sto...choon-yong
Part 2 - http://www.nextinsight.net/index.php/sto...choon-yong

Maintaining the competitive edge

Dr Toh Han Chong - THC: Private practice can potentially become too commoditised sometimes. What advice do you have for young doctors who are trying to balance business smarts with maintaining highest medical professionalism in practice?

Dr Loo Choon Yong - LCY: Our motivation to go into private practice was this – the group of us could leverage on each other’s strengths and look after a group of patients very well, and we know they will pay us on a cost-plus basis as we’re not subsidised. We have a little aphorism of our own – “look after the patients and the business will look after itself ”. I preach this all the time because we should do what is the best for our patients.

Of course, we don’t mind making a profit but that’s not our primary objective. Our primary objective is to look after the patients, and the consequence of our good work is profit. How can you try to churn and generate profits by giving treatments that are not necessary?

That’s why all of us are subjected to audits 30 days after the patients are discharged, to make sure unnecessary procedures were not carried out. It’s easier to practice professionally and ethically in a group practice as we could help each other stay above the water through continuous peer review. No one is exempt from audits – even Prof Walter Tan (Medical Director of Raffles Hospital) and my own cases get audited. If not, where’s the moral authority?

[yawnyawn]

RMG 2013 results,

Highlights of 2013 Performance

 Group achieved 9.4% growth in revenue to a record S$341.0 million
 Profit after tax grew 49.1% to S$85.3 million
 Revenue from Hospital Services Division increased by 12.4%
 Revenue from Healthcare Services Division grew 6.2%
 Healthy cash position of S$265.9 million
 Dividend growth of 11.1% (5c/share)

Excluding the gain of S$20.4 million that the Group made in 2013 from the RMM Disposal and fair value gain on investment properties of S$3.9 million, the proforma increase in net profit after tax for the Group was 14.5% from S$53.3 million in 2012 to S$61.0 million in 2013

At current market cap of $1.83B, RMB is trading at 30x earnings if we exclude the gain on RMM disposal and fair value gain on investment properties.

http://infopub.sgx.com/FileOpen/RafflesM...eID=275733
http://infopub.sgx.com/FileOpen/RafflesM...eID=275737

[mulyc]

At current market cap of $1.83B, RMB is trading at 30x earnings if we exclude the gain on RMM disposal and fair value gain on investment properties.

That, sounds really expensive. It's been in my watchlist for the longest time, but I've have several bad customer service related experiences there and while of course that is not as corelated, for some reason i never got down to vesting in it.