Nov 28, 2024

Raffles Medical Group Ltd
585 North Bridge Road
Raffles Hospital #11-00
Singapore 188770

Dear Members of the Board:

This letter is prepared by Sakura Research, a minority shareholder in Raffles Medical Group (the “Group” or “RMG”), in support of a shareholder-focused initiative aimed at enhancing value creation at the Group.

Raffles Medical is one of the most important healthcare companies in Singapore, with a rich history as a great Singapore success story. The contents of this 3-part report outline our concerns regarding the absurdly under-appraised prime Singapore properties, recent senior management changes, the continued lack of financial transparency in the Group’s China and insurance operations, and the massive accumulated losses in its Greater China and insurance segments.

These issues have contributed to the Group’s declining share price. Based on a Net Tangible Book Value peer (i.e., IHH Healthcare) comparison valuation, and under-appraised prime Singapore properties ripe for mark-to-market fair value gains, we reckon RMG should be trading at a market cap of over S$5 billion, instead of its current market cap of about S$1.6 billion only.

We believe that a comprehensive strategic review is essential to address these challenges, halt the destruction of shareholder value, and pursue profitable growth to unlock long-term value. RMG is at an inflection point. While its performance has lagged, local stock markets have surged. The case for change is clear and compelling, and the path to achieving that change is straightforward: lean into RMG’s core competencies and profitable markets while reducing exposure to capital-intensive and loss-making segments. We hope you share our view that now is the right time for the Group to take this important step in its evolution.

We would appreciate the opportunity to meet in person to expand upon the analysis provided above, hear your views on this opportunity, and advance our shared commitment to RMG’s success.

Best regards,
Sakura Research 

Sakura Research is LONG RAFFLES MEDICAL GROUP (SGX:BSL).
TERMS APPLY. OPINIONS ONLY.
The views expressed herein represent the position of Sakura Research based on publicly available information and are not intended to constitute investment advice or recommendations. This letter is not a solicitation for investment, and readers should conduct their own research and consult with a qualified financial advisor before making any investment decisions.