Raffles Medical Group

[ghchua]

The transition year 2021 they will give 2.5 or more. After which it will be up to half its avg sustainable PATMI. There is a chance div will be less than 2.5 cts after 2021 as currently it exceeds 50% of its PATMI.

Hi Bibi,

I think you should look at sustainable PATMI after their China hospitals has attained a steady patient load as a benchmark, and not their current PATMI. This is because RafflesHospitalShanghai had just started operation, whereas RafflesHospitalChongqing and RafflesHospitalBeijing are still in a process of ramping up their operations to increase patient load.

Given time, if you believe in them (which you will stay invested for long term if you have), I think there is a good chance that they can pay more than 2.5cts per year.

I think the spirit of this revised dividend policy is because they have taken up borrowings for capex of their China hospitals. Therefore, they cannot afford to pay high dividends unless their China hospitals started to contribute more.