Raffles Medical Group

[Bibi]

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.

[ghchua]

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.

[Bibi]

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.

[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.

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.

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.

[Bibi]

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.

[brattzz]

https://links.sgx.com/FileOpen/RafflesMe...eID=725659

Highlights of 1H 2022 Performance
▪ Group achieved 11.2% growth in revenue to S$382.3 million
▪ Group’s EBITDA grew 43.5% to S$107.0 million
▪ Group’s Profit after Tax grew 54.4% to S$60.0 million
▪ Revenue from Healthcare Services Division increased by 24.1%
▪ Healthy cash position of S$288.0 million
▪ Approval to open In-Vitro Fertilisation/Assisted Reproductive Therapy Centre at
Le Cheng Hainan,

Good HY results!

[weijian]

Servicing wealthy patients after all has much better margins than administering covid19 PCR/ART tests and vaccine shots. RMG also looks like a potential bet (low risk, medium potential gain) on a China recovery.

Raffles Reports Revenue of S$199.5M and PAT of S$38.3M

As Singapore opens up its borders, foreign patients returned to seek treatment at RafflesHospital. Singapore residents who postponed their elective surgery also returned for their treatment. As a result, the Group posted revenue growth of 6.5% to S$199.5 million in Q3 2022.

For the year to-date September 2022, the revenue was S$581.8 million, a growth of 9.6%. Better cost control and deployment of manpower, together with lower inventories and consumables used as well as a reduction in purchased and contracted services, resulted in a profit after tax (PAT) of S$38.3 million, a growth of 62.1% when compared to Q3 2021. The PAT for year-to-date September 2022 grew 57.3% to S$98.2 million.

As the pandemic situation improves, COVID-19 related services will be tapering off. Foreign and local patients are returning for treatment at RafflesHospital, RafflesMedical and RafflesDental branches. RafflesChinaHealthcare will benefit from any relaxation of travel restrictions.

https://links.sgx.com/FileOpen/Raffles%2...eID=736926

[weijian]

Here is one doctor who has spent some considerable money buying his own medicine, since disappointing 2H23 results were released.

984,650,404 (28th Feb) - 53.023%
997,450,404 (12th March) - 53.712%

In essence, Doc has purchase 12.8mil shares using ~13mil dollars to-date. Or more than 30% of the ~37.5mil he took home in FY22 dividends.

12th March (to date)
https://links.sgx.com/FileOpen/_Form%201...eID=791681

28th Feb (since release of FY23 results)
https://links.sgx.com/FileOpen/_Form%201...eID=790183

[weijian]

RMG's BOD is of the view that it should only provide 3 bands for its BOD/KPI - <250k, 250-500k, >500k due to the highly competitive nature of the business. I agree. There are definitely not enough doctors in Spore.

My view is that competition is so intense that even co-founder/Chairman Loo's pay should also be kept in great secrecy, lest some of the billionaires with poor health, decide to poach him to become their personal 24/7 family doctor.

The Board is of the view that, considering the confidential and commercial sensitivities associated with remuneration matters and the highly competitive resource environment in which the Company operates and the importance of ensuring stability and continuity of business operations, it is appropriate for the Company to disclose the remuneration of each individual Director and the CEO on a named basis with breakdown in percentages. Given the sensitivity of remuneration matters, the Company has also opted not to disclose the total remuneration of each individual Director in dollar terms to maintain confidentiality of the remuneration packages of these Directors. For the same reasons, the Company has not provided an upper limit to the remuneration band of “$500,000 and above”. In the wake of recent changes to the Listing Rules announced by the SGX, the Company will review its disclosures on remuneration and make appropriate adjustments in future reports according to SGX-prescribed timelines.

Dr Loo Choon Yong - $500,000 and above

RMG AR23:
https://links.sgx.com/FileOpen/2.%20RMG%...eID=794427

P.S. there are probably some lessons to be learnt here by our co-chairwomen at BWI!

[weijian]

Here is one doctor who has spent some considerable money buying his own medicine, since disappointing 2H23 results were released.

984,650,404 (28th Feb) - 53.023%
997,450,404 (12th March) - 53.712%

In essence, Doc has purchase 12.8mil shares using ~13mil dollars to-date. Or more than 30% of the ~37.5mil he took home in FY22 dividends.

12th March (to date)
https://links.sgx.com/FileOpen/_Form%201...eID=791681

28th Feb (since release of FY23 results)
https://links.sgx.com/FileOpen/_Form%201...eID=790183

Dr Loo has purchased ~38mil shares so far. If we assume the cost is ~1sgd/share, that is a cool 38mil. In essence, he has reinvested all his dividends received in the prior year into the company. Doc is consuming the medicine he dispenses!

984,650,404 (28th Feb) - 53.023%
997,450,404 (12th March) - 53.712%
1,022,700,404 (5th August) - 55.06%

5th August (to date)
https://links.sgx.com/FileOpen/_Form%201...eID=814223