Looking past the 2% growth for RMG

Raffles Medical Group posted a 2% growth in PBT for its Q3 2015. 9M2015 PBT was growing at 2.5%.

That seem like mature company's growth rate. Or is it?

Profit before tax for RMG was affected by 3 main reasons:

1. Higher Staff costs (10% growth)
2. Higher depreciation (38% growth)
3. Higher operating lease expense (22% growth)

Building the foundation for bigger things
RMG's higher staff costs was due to annual increment and higher headcount for new clinics.

RMG's higher depreciation due to conversion of previously leased space to specialist centres (for RMG own use) to meet growing patients' demand, and buying of medical equipments.

RMG's higher operating lease expense due to expansion of new clinics.

READ: Laying foundations for higher revenue in the future.
The higher expenses all relate to expansions and also generates revenue (compared to inflationary cost pressure)

Other catalysts intact

1. Acquired ISOS -> Now owns 10 clinics in China, Vietnam and Cambodia.
2. First clinic in Osaka, Japan -> Setting a foothold in the country with a huge aging population. Osaka is Japan's second largest city.
3. Finalising plan for Shenzhen's Hospital -> can synergise with ISOS's clinics in China.
4. Raffles Hospital now accepts emergency, inpatient and specialist outpatient care at subsidised rates, in collaboration with MOH -> More revenue!
5. Newly opened outlet at Shaw Centre (contributions to kick in for future quarters)
6. Raffles Holland V by Q1 2016
7. Raffles Hospital extension by 1H 2017

Looking through the veil, RMG's latest reporting is a result of "start up costs" for greater things. The stock price has came down quite a bit from $4.80 to $4.30.

Seems like many don't see through the veil, yet.