RHB believes this will be aided by more people taking up private healthcare insurance to cover the rising healthcare costs. Nevertheless, the company guided that if the current business situation of a higher loss ratio prevails, the insurance business could report losses for up to three years.
“We had earlier expected a rapid turnaround in its insurance business, but are slightly more cautious on our expectations now,” Jaiswal says.
RMG had also announced the retirement of its CFO Sheila Ng, effective November 12. While the company searches for a new CFO, Kimmy Goh, its long-time financial controller, will assume the responsibilities of that position. Jaiswal does not see this change in management as a reason for disruption in the company’s business operations.
RHB also highlights that since late February, RMG’s executive chairman Dr Loo Choon Yong has been gradually increasing his total stake in the group. Loo’s holdings have increased to 55.59% as of the end of November, from 53.02% early this year.
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For the longer term, RMG’s growth would be driven by overseas operations. That said, RHB sees limited positive rerating catalysts in the near term.
As at 10.30am, shares in RMG are trading at an unchanged 88.5 cents.
