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What Investors Should Know From Raffles Medical Group Ltd’s 2017 Letter To Shareholders

Raffles Medical Group Ltd (SGX: BSL) runs hospital and healthcare services in Singapore. It also has a network of clinics in five countries and thirteen cities. The company is also developing two hospitals in China.

Recently, Raffles Medical Group published its annual report for the year ending 31 December 2017.  Reading an annual report is one of the best ways to keep up with a company’s developments. With that in mind, I decided to go through Raffles Medical’s latest annual report to understand how it had performed in 2017, and to get a sense of the company’s prospects.

Generally, when reading an annual report, I would pay close attention to the letter to shareholders that the company’s chairman and/or CEO writes. In this article, we will look at one factor that I found to be interesting, Raffles Medical’s growth opportunities.

To begin with, Raffles Medical completed the Raffles Hospital Extension at the end of 2017 and opened Raffles Specialist Centre on January 2018. This extension provides significant growth opportunities for the company in the near to medium term. Here’s what the chairman shared (emphasis is mine):

“In Singapore, we are expanding our services to meet growing patient needs. I am pleased to inform you that the Raffles Hospital Extension project was completed at the end of 2017. We opened Raffles Specialist Centre on 22 January 2018. Together with Raffles Hospital, it will function as a fully integrated medical complex.

The increase in floor space will enable us to grow our clinics and bed spaces, and offer new clinical services such as radiotherapy services for cancer treatment. This extension would also provide us with the capacity to grow for the years to come.

Next, the chairman also shared some information about Raffles Medical’s overseas expansions.

“Our medical centres in China, Hong Kong, Cambodia, Japan and Vietnam are gaining traction with expatriate and local population. We are also very pleased that the 700-bed Raffles Hospital Chongqing and the 400-bed Raffles Hospital Shanghai will be opening in the fourth quarter of 2018 and second half of 2019 respectively.”

Given its exposure to a number of countries beyond Singapore, Raffles Medical is well positioned to diversify and grow its income for the foreseeable future.

Foolish Takeaway

In sum, Raffles Medical should be able to grow its business for the foreseeable future, both locally and in overseas. We should be watching if the growth will translate into profits over the long term.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned. Motley Fool has a recommendation for Raffles Medical Group Ltd.