Raffles Medical & Sheng Siong

Dow and STI Market may be experiencing a volatile situation now. For these 2 defensive counters , I think price might not be affected much with its nature of business. Good or bad time, I think people will still needs to see Doctor /hospital or buy their daily groceries stuff.

Raffles Medical Group Ltd engages in the medical clinics operation and other general medical service businesses primarily in Singapore. The company operates through three segments: Healthcare Services, Hospital Services, and Investment Holdings. Its flagship hospital is Raffles Hospital, a tertiary care hospital that offers services, including emergency, cancer, children and women care, traditional Chinese medicine, counselling, dental, diabetes and endocrinology, dialysis, ear nose and throat, eye, family medicine, fertility, health screening, heart, internal medicine, international patients services, neuroscience, pain management, rehabilitation, radiology, Japanese clinic, orthopaedic, skin and aesthetics, surgery, urology, and nuclear medicine services for inpatients and outpatients. The company also operates 100 medical clinics that provide various services, such as general practice/family medicine, emergency, health check, health screening, immunization, travel health, specialty, minor surgery, X-ray, pre-marital screening, and corporate programs; provides health and related insurance; trades in pharmaceutical and nutraceutical products, and diagnostic equipment; and provides healthcare management and consultancy services, as well as specialized medical, medical laboratory, imaging center, dental, and clinical services. In addition, it owns properties; develops IT solutions; provides advisory and medical emergency assistance services; and sells medical kits. The company was founded in 1976 and is based in Singapore.

Total Revenue has been consistently increasing from $340.99m in 2013 to $477.58m in 2017.The Total Revenue is growing at a CAGR of 8.1%. A single digits high ,of which I think is quite good already. 

Total annual dividend has been quite encouraging as the paying out rate has been increasing from 1.7 cents to 2.2 cents .I thibt share holder would be happy to receive higher

 dividend 

Operation cash flow has been quite healthy as they are able to generate $71.19m in 2013 to $82 .69m in 2017. 

Net income Margin has been generally declining from 24.89% to 14.82% in 2017.
It might be due to higher material /operation costs.

NAV of 40.01 cents.
EPS of 4 cents.
PE of 27.64 times

For RMG, I have two possible fair values depending on how well it can execute it's new expansion and growth of it's Bugis hospital extension and also it's two China hospitals to grow it's EPS.

For the conservative fair value, it is $1.14 assuming a CAGR of 10% on it's EPS for next 7 years. For the more aggressive fair value, it is $1.46 assuming a CAGR of 14% on it's EPS for next 7 years. Thus, any price $1.14 and below is a bargain to me to accumulate shares of RMG.

not a call to buy or sell.
dyodd.

Sheng Siong Group Ltd., an investment holding company, operates supermarkets in Singapore. The company’s stores offer an assortment of live, fresh, and chilled produce, such as seafood, meat, and vegetables; and packaged, processed, frozen, and/or preserved food products, as well as general merchandise, including toiletries and essential household products. It is also involved in general trading, and wholesale import and export businesses. The company operates approximately 43 supermarkets/grocery stores under the Sheng Siong brand name. Sheng Siong Group Ltd. was founded in 1985 and is headquartered in Singapore.

For Sheng Siong, I have two possible fair values depending on how well it can continue to grow it's supermarket business both locally and in China it is now entering.

For the conservative fair value, if we assume Sheng Siong slows down it's business growth at CAGR of 6% on it's EPS, then fair share price is $0.95 which happens to be around the price it is currently traded at.

For the aggressive fair value, if we assume Sheng Siong can continue to grow it's EPS same as past 5 years CAGR of 9.06% without any slowing down in the growth of it's local and China supermarket businesses, it's fair share price is $1.24.

Thus, any price at $0.95 and below to me is ok to accumulate Sheng Siong.

Not a call to buy or sell.
dyodd