Daily Brief Singapore: Raffles Medical Group, ISEC Healthcare, Healthway Medical Corp, Raffles Education Corp and more

• Raffles Medical Group (RMG) is a leading integrated private healthcare provider in Asia, with a strong presence in Singapore and a growing footprint in China and other parts of the region.
• The company’s growth strategy is centered on expanding its hospital and clinic network, particularly in China, and capitalizing on the rising demand for quality healthcare driven by aging populations and increasing affluence.
• While facing challenges such as rising operating costs and execution risks in new markets, RMG’s established brand, integrated healthcare model, and strong balance sheet position it well for long-term growth.

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• ISEC Healthcare is a leading, specialized eye-care provider with a strong and growing presence in Malaysia and Singapore, well-positioned to capitalize on favorable demographic trends.
• The company demonstrates a consistent track record of revenue and net income growth, driven by both organic expansion of its centers and strategic acquisitions.
• Backed by Aier Eye Hospital Group, a major strategic shareholder, ISEC has the support to pursue further regional expansion, although it faces risks from its reliance on key medical specialists and potential regulatory changes.

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• Privatization by OUE Healthcare to Drive Synergies and Regional Growth: Healthway Medical Corp (HMED) was delisted in November 2023 following its acquisition by OUE Healthcare (OUEH). This strategic move is expected to unlock significant synergies by integrating HMED’s extensive network of primary and specialist clinics with OUEH’s broader regional healthcare ecosystem. The integration aims to create a comprehensive healthcare platform offering a full spectrum of services, from preventive to tertiary care, and to streamline operations for cost efficiencies.
• Established Player in a Favorable Market: HMED is a well-established private healthcare provider in Singapore with a network of over 130 clinics and medical centers. The company is poised to benefit from favorable long-term trends in the Singaporean healthcare market, including an aging population, rising affluence, and a growing focus on preventive care, as highlighted by the government’s Healthier SG initiative.
• Shift in Strategy Towards an Asset-Light Model and Regional Expansion: Under OUEH’s ownership, HMED is part of a larger strategy that emphasizes an asset-light business model and regional expansion. This involves forming strategic partnerships to leverage local expertise and resources, which is expected to enhance service quality and accessibility while optimizing capital allocation for higher-margin businesses.

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• Raffles Education Corp (REC) is a premier private education provider in Asia-Pacific, with a network of 16 colleges and universities across 9 countries. The company’s core business is providing post-secondary education in design and business-oriented disciplines.
• The company has been facing profitability challenges, with volatile net income and a downward trend in revenue over the past decade. However, recent financial data shows a return to profitability in the latest fiscal year.
• REC is undertaking strategic initiatives to strengthen its financial position, including asset disposals to reduce debt and a focus on cost management. The company has also recently completed several tranches of a bond issuance to improve liquidity.

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