The affiliate, Renji Hospital, and RFMD will establish a "dual circulation" medical resource service system, to advance a new model of collaborative development and promote Shanghai as an international medical tourism hub.
The group's international-standard service system will be integrated into China's domestic healthcare system, and Renji's Chinese medical expertise will be promoted through RFMD's global network. Two initiatives will be launched - the Renji International Cloud Clinic, enabling cross border telemedicine consultation with Renji physicians; and collaborative activity between the medical teams of both institutions.
The group's China hospitals look set to continue their positive trajectory in terms of patient volumes and revenue on increased service offerings and community engagement efforts.
The way Ong sees it, Shanghai, in particular has seen steady growth in FY2024 by partnering with insurance companies and corporations to offer tailored healthcare packages.
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Despite potential competition amid China's new health policy allowing wholly-foreign-owned hospitals, RMG remains optimistic about the immense opportunities in the country given its growing brand recognition. Management expects its China operations to achieve Ebitda breakeven by end-FY2026 as it continues to ramp up its bed utilisation there.
"Despite macroeconomic uncertainty, we leave our FY2025-FY2027 forecasts intact due to its largely non-discretionary and domestic demand resilience," says Ong, who has forecasted FY2025 (ending December 2025) revenue to come in $767 million and Ebitda to be at $133 million.
The way Ong sees it, re-rating catalysts are higher-than-expected dividends and earnings growth, as well as faster turnaround of its China operations.
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In view of the group's strong operating cashflow, the group has updated its dividend policy to pay out at least 50% of core earnings annually. It also committed to return any excess capital (net of capex & M&As) to shareholders via special dividends.
Since the group announced in February to pledge to buy back up to 100 million shares in the next two years, it has so far acquired 7.7 million shares in the open market at an average cost of 98 cents (cumulatively 33.8 million treasury shares held). "This ongoing share buyback should help to further optimise its capital structure, improve ROE, and achieve EPS accretion," says Ong.
As at 3.30pm, shares in RMG are trading at $1.00, representing a 19.05% increase ytd.
