August 5, 2021

10 thoughts on “Why is Raffles Medical Great? – Facts & Figures

  1. Hi Rolf,

    A good and detailed analysis of RMG. I have been monitoring this for a few months now. But personally feel that the price is on the high side. But, nevertheless, it may not be to other. What will be the valuation you had on RMG?

    BTW, I'm also new to blogging and had added your blog in my blogroll. You can read it here.

    All the best in your investment and health!


  2. Hi David,

    Thanks for the comments. I have to apologise for the late reply as I am only back home from overseas last night.

    I agree at 25x PE, RMG is not cheap when comparing to stocks in general. But when comparing to competitors, it is not too high or even quite low. In fact in 2013, RMG’s PE is even higher at 30x. That is the time when I bought in.

    Refer to UOB report in June 14, RMG competitors PE are:
    IHH Healthcare 53.1x, Health Mgmt Int 37.9x, Bangkok Dusit Med (TB) 41.7x, Bumrungrad Hospital (TB) 34.9x, KPJ Healthcare (MY) 31x etc .

    Average PE of the industry in 2013 is 38.2x. 2014 average PE estimate is 33x.

    Therefore it is subjective to decide if RMG is expensive. We may want to take into account its growing prospect too. For me, other considerations may include if there are better other stocks around, how I want to diversify my portfolio etc etc. Your call eventually! .

    By the way, thanks for adding me to your blogroll. I added yours as well here.

    Welcome to the Singapore blogging world!

    Wish you good health and wealth too!


  3. Hi Rolf,

    Great analysis on Raffles Medical. Good that you can include both your own personal experience as well as the facts and figures into your overall investment framework. Although many could have felt that the price currently is perhaps slightly on the high side (not sure how at what price you've entered), I believe you have an edge there due to your own involvement as a customer of the company.

    All the best 🙂

  4. Hi Secret investors,

    Thanks for the compliments. Involvement as a client is little now. It is a bad thing for investment, but good thing for my health. Haha.

    I entered at low 3 and hi 3 different lots each time. Actually I am attracted by the Bugis extended hospital and the Holland V new facility plus strong balance sheet. Also I classify RMG in my long term category of stocks.

    RMG price is expensive to many. To me, price is fair, though not cheap. Anyway the price had been increasing steadily from 2-2.5 in 2012 to 2.5-3.5 in 2013 and 3-4 in 2014 with respect to earnings.

    I wrote in above comments before. If u refers to UOB report in June 14, RMG competitors PE are:
    IHH Healthcare 53.1x, Health Mgmt Int 37.9x, Bangkok Dusit Med (TB) 41.7x, Bumrungrad Hospital (TB) 34.9x, KPJ Healthcare (MY) 31x etc . Average PE of the industry in 2013 is 38.2x. 2014 average PE estimate is 33x.

    Now RMG is 25x PE. That is just my opinion.  can be wrong definitely.

    You analysed RMG before in detail like what you did for SCI? By the way, you heard about ISEC? Another new interesting healthcare company.

    1. Hi Rolf,

      Your entry price seems good and I believe you've made some decent unrealized profits there. I did look at it some years back and I agree that RMG is indeed a good quality stock.

      However, if I were to purchase at current prices, I will have some concern with the price paid. On a relative basis, when compared to other competitors it looks quite reasonable. However, on an absolute basis, I think a P/E of 25x is a bit too high for me to stomach. My self-imposed limit for a very high quality company is 18-22x.

      Moreover, the P/E used is based on the latest earnings which also happens to be the highest in 5 years. Although there may be growth prospects, we can never be sure whether these supposed growth can still exceed its cost of capital in the future. If we were to use the earnings for 2012 which is the 2nd highest in the said period, the P/E becomes 37x.

      For these reasons, I probably will not go ahead (obviously, I might be wrong in my analysis) but of course if I dig deeper (I haven't look into it in detail yet), my opinions might change. Your personal experience, in-depth study and maybe familiarity with the business and expansion plans could have given you a different view of the company which I haven't come to terms yet due to my lack of study. In the end, what matters most is still your independent data and reasoning about the company 🙂

    2. Hi Secretinvestors,

      I think I mentioned before, I am not good in detail analysis. I am better with people and use of gut feelings base on work experience. I think you got most of the analysis correct, and all reasons stated are very relevant.

      I also learnt one phrase from another fellow blogger SMOL "Different strokes for Different Folks!"


    3. Hi Rolf,

      Very well-said – "Different strokes for Different Folks." Detail analysis is the easy part while people and gut feelings based on experience is the hard part. You've mastered the hard part and I ought to learn from you.

      Hopefully reading your blog will be a good start. Thanks! 🙂

  5. Hi Secretinvestors,

    I do not agree with you. Detail analysis is more difficult. People and gut feelings are just crap! The most "powderful" word I learn from another blogger is "DYODD" i.e. do your own due diligence.

    LOL. Let's continue to enjoy ourselves here in the blogspace.

    Great year ahead for you.

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