Raffles Medical has been downgraded from ‘buy’ to ‘neutral’ by RHB, with a revised target price of S$1.10, reflecting a 3% upside. The downgrade comes despite expectations of a stronger second half of 2025, as the company’s current valuation already accounts for anticipated mid-teens profit growth. The first half of 2025 results met 47–48% of the full-year estimates, aligning with projections.
The decision to downgrade is influenced by the absence of special dividends or major mergers and acquisitions, which limits immediate growth catalysts. However, the long-term outlook remains positive, driven by steady revenue growth in Singapore and China, and progress towards EBITDA breakeven in China. The company’s ex-cash price-to-earnings ratio remains attractive, yet the valuation is comparable to regional peers.
Shekhar Jaiswal, an analyst at RHB, noted that whilst the company’s financial metrics are appealing, the lack of immediate catalysts necessitated the downgrade. The report highlights that the company’s valuation already reflects expected profit growth, suggesting limited room for further appreciation in the short term.
Raffles Medical’s strategic focus on expanding its healthcare partnerships in China and maintaining steady growth in its core markets supports its long-term prospects. However, investors may need to temper expectations for immediate returns, given the current market conditions and valuation levels.
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