OCBC Investment Research upgraded healthcare service provider Raffles Medical Group to 'buy' from 'hold' and raised its target price to S$2.82 from S$2.63, on expectations of stronger earnings in the second half of the year.
By 0125 GMT, shares of Raffles Medical were flat at S$2.47, and have gained 16.5 percent since the start of the year, compared to the FTSE ST Mid Cap Index's 26.2 percent rise.
Although staff costs are rising, OCBC said the company will see better patient loads, giving it room to raise charges.
The brokerage expects Raffles Medical's revenue and core earnings to grow 8.2 percent and 24 percent in the second half of the year compared to the previous six months.
The opening of a new specialist centre in the first half of 2013 will help to boost Raffles Medical's net margin to 17.7 percent from 17.3 percent, OCBC said.
0928 (0128 GMT) (Reporting by Charmian Kok in Singapore; firstname.lastname@example.org) (Editing by Eric Meijer)
Keywords: MARKETS SINGAPORE STOCKSNEWS/RAFFLESMEDICAL