CIMB Research raised its target price on shares of Raffles Medical Group to $3.52 from $2.96 and kept its ‘outperform’ rating, as it expects the healthcare provider to see operating efficiency.
By 9:24 a.m., Raffles Medical shares were up 0.4% at $2.54, and have gained 19.8% since the start of the year, underperforming the FTSE ST Mid Cap Index’s 28.4% rise.
Raffles Medical said its net profit in the third quarter rose 7% to $12.7 million from a year ago, which was below CIMB’s estimates.
The brokerage cut its 2012-2014 earnings per share forecasts by 2-10% to account for higher staff costs.
However, CIMB noted that salary increases were in line with industry-wide practices, and expects Raffles Medical to see a slowdown in new hiring, which will reverse the trend of ising staff costs, allowing operating efficiency to follow.
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