Raffles Med Shield Plan

16  July  2018  –  Singapore,  RafflesHealthinsurance  (RHI),  a  fully  owned  subsidiary  of RafflesMedicalGroup,  announced the  launch  of  Raffles  Shield,  making  it  the  seventh  player to  enter  the  industry.  Raffles  Shield  is  the  first  Integrated  Shield  Plan  (IP)  developed  in collaboration  with  RafflesMedicalGroup  and  a  Medisave-approved  IP  providing  coverage for  hospital  and  surgical  expenses.

“As  a  health  insurance  specialist  and  as  part  of  a  healthcare  group,  we  have  the  unique advantage  of  understanding  the  business  of  both  healthcare  and  insurance. 

We  have  been studying  the  Shield  market  for  a  while  now  and  appreciate  the  challenges  that  it  faces.  We are  confident  that  we  can  now  offer  a  product  that  meets  the  changing  needs  of  the  market,” shares Ms  Christine  Cheu,  General  Manager,  RafflesHealthinsurance. The  plan  comprises  MediShield  Life,  a  national  health  insurance  plan  administered  by  the Central  Provident  Fund  Board,  and  an  additional  private  insurance  coverage  administered  by RafflesHealthinsurance  which enhances  the  basic  coverage  provided by  MediShield Life.   RafflesHealthinsurance  has  observed  that  many  who  purchase  IPs  are  keen  to  have private  hospital  coverage  without  overly  expensive  premiums,  and  would  like  to  have  more flexibility  to  manage  their  premiums.  In  response  to  this,  Raffles  Shield  offers  two  attractive options  –  the  Raffles  Hospital  Option  and  the  High  Deductible  Option. On  top  of  this,  there  are  two  riders  that  policyholders  can  add  on  to  enhance  their  coverage.

The  Premier  Rider  provides  additional  benefits  such  as  immediate  family  accommodation and  Traditional  Chinese  Medicine  coverage.  The  Key  Rider  reduces  the  amount  that policyholders  co-pay.  It  is  in line  with MOH’s  co-payment  requirement  for  new  riders.   RafflesHealthinsurance  is  also  ready  to  offer  unique  coverage  to  individuals  with  certain pre-existing  conditions  and  work  with  them  through  the  Raffles  Care  Management Programme  to  improve their  overall  well-being. 



After touching the low of 98 cents, it has staged a strong rebound and rises higher to touch the high of $1.06 today, this is rather bullish.

Today the share price rises also accompany with high volume which is a healthy sign that the momentum may continue to head higher.

Short term wise, likely to move up to retest $1.10 with extension to $1.15 .

I think current price level may attract some bargain hunter interest.

Trade / invest base on your own decision.

 The potential catalysts are the two new China hospitals which will contribute to it's earnings growth going forward. Even if the initial execution meets with hiccups, I think they will be able to work things out for the longer term as I am confident they have already done their extensive due diligence and ground studies before embarking on the new hospitals. And it is not just one but two new hospitals set up in two separate cities in China. To be able to trigger such a huge expansion project, they must have worked out that on a long term basis, the market there in China have tailwinds favouring demand for private medical healthcare. And Chongqing and Shanghai are two of the largest cities in China which are strategically located with high population and considered few of the important economic centres of China apart from Beijing.

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.

 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

 Dividend has been generally increasing from 1.7 cents in 2013 to 2.2 cents in 2017. This is really a welcome news for shareholder .

 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 opportunity to me.

not a call to buy or sell. Please dyodd.

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.