QUICKNOTE: Q3 EPS Flat on Continued Expense Ramp

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Bottom-Up

<p>Singapore-based Raffles Medical Group operates one of the island&rsquo;s leading private hospitals along with a chain of physician clinics.&nbsp; The shares have performed respectably over the past twelve months: +12% with most of the gains coming since May. The company has announced several expansion activities this year, most notably the construction of a new private hospital in the Pudong area of Shanghai. Even though we think that China&rsquo;s healthcare service market is underserved, we think the shares, which trade at a premium to private market multiples, are ahead of themselves and vulnerable to disappointment.</p>

Singapore-based Raffles Medical Group operates one of the island&rsquo;s leading private hospitals along with a chain of physician clinics.&nbsp; The shares have performed respectably over the past twelve months: +12% with most of the gains coming since May. The company has announced several expansion activities this year, most notably the construction of a new private hospital in the Pudong area of Shanghai. Even though we think that China&rsquo;s healthcare service market is underserved, we think the shares, which trade at a premium to private market multiples, are ahead of themselves and vulnerable to disappointment.

Raffles Medical Group

Ramping Capex While Priced to Perfection