Brokers' Call

RAFFLES MEDICAL GROUP

Brokers: OCBC Investment Research

Call: Hold

Target price: $1.54

While there is an inherent risk from medical tourism for Singapore's private healthcare sector, the change was not significant for Raffles Medical Group (RMG), on the back of a diversified international patients mix.

Overseas expansion is important to ensure long-term growth potential.

International clinics have been doing well in countries including Cambodia and Vietnam. The group's Shanghai hospital project is also slated to be ready in 2018.


WING TAI HOLDINGS

Brokers: CIMB

Call: Hold

Target price: $1.87

Wing Tai's results of the fourth quarter and the 2016 financial year were below expectations. Fourth-quarter net profit fell 98 per cent year on year to $1.9 million on a revenue of $140.7 million, as lower gross margins and reduced fair-value gains dragged down the bottom line.

The company sold $208 million worth of residential units in the financial year in Singapore, China and Malaysia. But residential development margins were a drag on profits.

Wing Tai will continue ramping up sales of residential units, which will further lighten its current gearing and enable it to explore more land acquisitions or reinvestment opportunities.


ROXY-PACIFIC HOLDINGS

Brokers: OCBC Investment Research

Call: Hold

Target price: 52 cents

Roxy-Pacific's management continues to buy company shares from the open market, which trades with limited liquidity.

Group CEO Teo Hong Lim has bought through his investment vehicle, Kian Lam Investments, some 35,000 shares while the share price traded at a wide intra-day range of 39 and 47 cents.

Mr Teo has also entered the open market twice in the last two months, buying some 152,000 shares for an average 46 cents each.

Roxy-Pacific reported earlier in the month that its second-quarter profit after tax and minority interest rose 57 per cent year on year to $20.6 million, mostly due to fair- value gains on its Australian assets, higher contributions from its development segment and stronger share of associates and joint venture profits from Eon Shenton.

The group sits on total pre-sale revenues of $363.3 million, which will be recognised from the third quarter of 2016 to 2020.

A version of this article appeared in the print edition of The Straits Times on August 29, 2016, with the headline 'Brokers' Call'. Print Edition | Subscribe