Raffles Medical scoops up more shares; Wing Tai chairman’s stake climbs further

OVER the five trading sessions from Nov 24 to Nov 30, the Straits Times Index shed 1.2 per cent. 

There were 53 filings for changes in director interests and substantial shareholdings in that period, from 33 primary-listed stocks, as well as 98 filings for share buybacks by 30 companies.

Raffles Medical Group

Private healthcare player Raffles Medical Group has continued its share buyback spree, taking advantage of a fall in its share price following its recent earnings announcement.

Over the five trading sessions, Raffles Medical purchased 1.9 million shares on the market over four transactions. The price paid per share ranged from S$1.04 to S$1.06.

The healthcare company has been buying back shares since Nov 7, scooping up 4.8 million shares so far. This accounts for 0.2581 per cent of all shares issued by the company, excluding treasury shares.

Raffles Medical began its latest round of buybacks a day after it posted a third quarter net profit of S$12.4 million, down 67.4 per cent from S$38 million in the corresponding year-earlier period.

The weak results had been attributed to a discontinuation of Covid-19 activities, while cost inflation also eroded the group’s margin.

Following the announcement, Raffles Medical’s share price dipped 10.8 per cent to close on Nov 6 at S$1.07, from S$1.20 the day before.

The stock has continued to fall, ending Friday (Dec 1) at S$1.05. The counter has fallen 22.9 per cent year to date, from S$1.3625.

Founded in 1976, Raffles Medical operates medical facilities and hospitals in Singapore, China, Japan, Vietnam and Cambodia.

It also has an insurance business as well as a dental arm.

During the Covid-19 pandemic, it had made up for the lack of medical tourists by offering Covid-related services such as polymerase chain reaction (PCR) tests and vaccinations.

It continues to helm transitional care facilities that were set up during the pandemic, aiding public hospitals with managing bed demands.

Healthcare stocks enjoyed a boost from the pandemic, but have fallen out of favour with post-Covid normalisation.

Raffles Medical’s share price, now far short of its pandemic highs, may yet be boosted by the current share buyback scheme.

A report by the Singapore Exchange (SGX) Research noted that the company in 2022 spent more than S$24.3 million acquiring 20.9 million shares on the market for an average price of S$1.17.

Its last transaction then occurred on Jun 28, 2022, when it bought 700,000 shares on the market between S$1.12 and S$1.13.

A 57.3 per cent rise in earnings for the nine months ended Sep 30, 2022 spurred a share price recovery that peaked at S$1.52 this year on Feb 9.

The company is also on the hunt for growth, as it looks for suitable targets to acquire in key markets.

Its most recent acquisition was in October this year, as it picked up a majority stake in American International Hospital in Ho Chi Minh City, Vietnam, for US$45.6 million.

The company said at the time that the deal would enable Raffles Medical to augment its clinic operations in the city, while meeting the growing demand for private healthcare services in Vietnam.

It would also enable the group to further diversify its hospital operations beyond Singapore and China, as part of its long-term strategy.

Wing Tai Holdings

Wing Tai chairman and managing director Cheng Wai Keung continued to add to his deemed interest in the company, as his spouse Helen Chow acquired more shares.

His deemed interest in the real estate developer increased by 50,000 shares through two transactions, on Nov 24 and Nov 27.

This marginally increased his stake to 61.37 per cent, from 61.36 per cent.

Filings on SGX did not disclose the consideration for the purchases.

The transactions follow a steady pattern of share acquisitions by Cheng’s wife since Sep 8. Before that date, Cheng’s deemed interest was 60.2 per cent.

From Sep 8 through Dec 1, the stock has fallen from S$1.3406 to S$1.30. Its counter is down 12.1 per cent year to date, from S$1.4786.

Cheng was appointed to the board of Wing Tai in 1973. The company, which was listed in 1989, has core businesses in property investment and development and lifestyle retail.

It owns and manages a portfolio of quality real estate developments in Singapore, Malaysia, China, Japan, Australia and Hong Kong.

Its retail business represents global brands such as Adidas and G2000 in Singapore, as well as Mango and Furla in Malaysia.

It also has a joint venture with Japan’s Fast Retailing to operate Uniqlo stores in Singapore and Malaysia.

For its FY2023 ended Jun 30, the group recorded total revenue of S$476.3 million.

This was a 7 per cent decrease from FY22, attributable mainly to a lower contribution from development properties.

Net profit fell 91 per cent to S$13.3 million, from S$140.2 million, mostly due to its operations in Hong Kong.

Wing Tai had flagged, at the start of August, that it would report a “significant decrease in net profit” for FY23. Its shares promptly began to slide, falling from S$1.40 on Aug 4, before the guidance was given, to S$1.31 on Aug 21.

In the past, active share buybacks by Cheng and his family have fuelled rumours that Wing Tai would be privatised.

In 2012, the Cheng family, then a major shareholder, made a successful partial offer at S$1.39 per share to bring its stake above 50 per cent.

Cheng said then that the offer was not to delist the company, but to boost the family’s shareholdings and gain statutory control of the company.

Cheng is raising his stake at a significant discount. Wing Tai’s net asset value per ordinary share as at Jun 30, 2023, was S$4.13.