Raffles Medical Group expands overseas for the first time since 2010

The tender results for a private hospital in Hong Kong is likely to be released in 4Q12.

According to CIMB, this tender is the most concrete overseas expansionary commitment the group has made since setting up its medical centre in Shanghai in 2010.

Here's more from CIMB:

RFMD has submitted a tender called by the Hong Kong Government for the development of a private hospital on the Aberdeen Inland Lot No. 458 site. Tender results are likely be released in 4Q12.

There are a few factors that favour new curative healthcare players in the Hong Kong market, including frequent long waiting lists for public hospitals causing a spillover to private sector and PRC patients choosing Hong Kong as a destination for their medical needs (The factors shaping private healthcare dynamicsare elaborated on page 2.) All these are expected to drive the demand for private sector medical services in the territory.

When asked, management was understandably tight-lipped about the tender pricing. What we do know is that the site can accommodate a 300-500 bed hospital that will sit on a built-up of between 28,000–46,000 sq meters. Land premium is roughly 30% of the weightage. Good evidence-based medical practice, professional development, quality assurance as well as consistency and transparency in charging professional fees are also criteria being evaluated. Should the group be successful in this tender, capex requirements will only come in by 2Q13 and are to be paid progressively over three years.