Raffles Medical Group

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#81
(26-07-2021, 09:48 AM)ghchua Wrote:
(26-07-2021, 08:42 AM)desmondxyz Wrote: good result but they cut their div?

Hi desmondxyz,

Please refer to their updated dividend guidance:

During the FY2020 results’ announcement earlier this year, the Board announced its intent to consolidate its
interim and final dividends with effect from FY2021 into an annual core dividend of up to half its average
sustainable PATMI. In view of the foregoing, the Directors will not be declaring any interim dividend. However,
for the transition year FY2021, the Group expects to pay a total final dividend of not less than 2.5 cents per
share.

The transition year 2021 they will give 2.5 or more. After which it will be up to half its avg sustainable PATMI. There is a chance div will be less than 2.5 cts after 2021 as currently it exceeds 50% of its PATMI.
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#82
(26-07-2021, 02:25 PM)Bibi Wrote: The transition year 2021 they will give 2.5 or more. After which it will be up to half its avg sustainable PATMI. There is a chance div will be less than 2.5 cts after 2021 as currently it exceeds 50% of its PATMI.

Hi Bibi,

I think you should look at sustainable PATMI after their China hospitals has attained a steady patient load as a benchmark, and not their current PATMI. This is because RafflesHospitalShanghai had just started operation, whereas RafflesHospitalChongqing and RafflesHospitalBeijing are still in a process of ramping up their operations to increase patient load.

Given time, if you believe in them (which you will stay invested for long term if you have), I think there is a good chance that they can pay more than 2.5cts per year.

I think the spirit of this revised dividend policy is because they have taken up borrowings for capex of their China hospitals. Therefore, they cannot afford to pay high dividends unless their China hospitals started to contribute more.
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#83
(26-07-2021, 05:19 PM)ghchua Wrote:
(26-07-2021, 02:25 PM)Bibi Wrote: The transition year 2021 they will give 2.5 or more. After which it will be up to half its avg sustainable PATMI. There is a chance div will be less than 2.5 cts after 2021 as currently it exceeds 50% of its PATMI.

Hi Bibi,

I think you should look at sustainable PATMI after their China hospitals has attained a steady patient load as a benchmark, and not their current PATMI. This is because RafflesHospitalShanghai had just started operation, whereas RafflesHospitalChongqing and RafflesHospitalBeijing are still in a process of ramping up their operations to increase patient load.

Given time, if you believe in them (which you will stay invested for long term if you have), I think there is a good chance that they can pay more than 2.5cts per year.

I think the spirit of this revised dividend policy is because they have taken up borrowings for capex of their China hospitals. Therefore, they cannot afford to pay high dividends unless their China hospitals started to contribute more.
Hi ghchua,

Yes i understand over the long term their profit will likely increase due to contribution from China hospitals. I just like to point out there is a chance in say 2022 the div will be less than 2.5cts. Their net profit might need to be in excess of 90mil in order to maintain the 2.5cts in year 2022.

Its not about their dividend actually since its a mere 1.9% based on current price.
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#84
(26-07-2021, 09:04 PM)Bibi Wrote: Yes i understand over the long term their profit will likely increase due to contribution from China hospitals. I just like to point out there is a chance in say 2022 the div will be less than 2.5cts. Their net profit might need to be in excess of 90mil in order to maintain the 2.5cts in year 2022.

I think we have to look at the dividend policy in totality. It is about having a progressive dividend payout whereby they will be able to pay progressively higher dividend in the long term as earnings improves. Just taking a snapshot of one year (like 2022) might not be useful if one is investing in the company for long term.

(26-07-2021, 09:04 PM)Bibi Wrote: Its not about their dividend actually since its a mere 1.9% based on current price.

The market is pricing the company as a growth stock, and not a dividend yielding one. But it has got nothing to do with the dividend policy and the spirit of it. The dividend policy is not dependent on the share price, but on the capital management framework of the company.
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#85
Yes I agree with you ghchua. I just wanted to point out in case someone was looking at the dividend and thinking it wont get reduced.
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