Brokers' take

Raffles Medical Group | Sell Target price: S$1.12 Aug 1 close: S$1.21 Maybank Kim Eng Research, Aug 1

WE downgrade the stock to "sell" as: (1) Singapore's growth missed again for the third straight quarter and underlying weakness is structural in our view; (2) management guided for much higher than expected startup losses for its China hospitals that could erode up to 30 to 40 per cent of group earnings before interest, tax, depreciation and amortisation. As a result we cut our FY17-19 estimate earnings per share by 3 to 38 per cent for FY17-19 estimate and our discounted cash flow-based target price by 27 per cent to S$1.12 (weighted average cost of capital 7.1 per cent; long-term growth 1.5). Raffles Medical trades at a price-earnings ratio of 40 times FY18 estimate, with a profit decline outlook for the next three years.

Singapore Airlines | Hold Target price: S$10.10 Aug 1 close: S$10.49 UOB Kay Hian Research, Aug 1