Aggressive capacity building to pump life into ailing Raffles Med

The $310m Raffles Hospital extension will remedy intensifying cost pressures.

Aggressive building this year will almost double Raffles Medical's capacity in 2016, which in turn will give its sluggish earnings a life-saving boost.

According to CIMB, the $310m Raffles Hospital extension project will drive a 19% earnings CAGR in FY16-18 and will address concerns of increasing costs and declining medical tourism receipts.

Raffles Hospital has not seen any significant increasei n capacity since its opening in 2001. Raffles Med will also benefit from capacity additions at Raffles Holland Village.

"The capacity limitation of Raffles Medical is long known. New capacity is finally being built and we are optimistic that this is clearly a case of “build-it-and-they-will-come”. We expect the added capacity from the hospital extension to fuel growth for RMG’s hospital segment," stated CIMB.