Raffles Medical Grp

Raffles Medical Grp: OCBC Downgrade to HOLD and cuts TP to $2.68 from $2.82. House believe that there are still ongoing uncertainties over the possible commencement date of RMG proposed new Specialist Centre in the Orchard area. Thus adopt a more conservative approach, and assume that the delay in operations would stretch until late 2013 or early 2014 (previously 1H13). This could have a negative flow-through effect to its Raffles Hospital as this new Specialist Centre was intended to act as an additional platform for referrals. Hence, trim FY13F rev and EPS estimates by 2.7% and 5.0%, respectively. This lowers fair value estimate from $2.82 to $2.68, still pegged to 24x FY13F EPS. Coupled with RMG’s recent strong share price performance.