Top Stock Market Highlights of the Week: Raffles Medical Group, Singtel and Meta Platforms
Welcome to this week’s edition of top stock market highlights.
Raffles Medical Group (SGX: BSL)
Raffles Medical Group, or RMG, announced a move to expand its presence in Vietnam.
The integrated healthcare player entered a strategic partnership with My My Trading Services Company to acquire a majority interest in American International Hospital (AIH) in Ho Chi Minh City (HCMC).
As part of the agreement, RMG will also manage the operations of AIH under a management service agreement.
AIH was completed in 2018 and is a purpose-built, fully-equipped 120-bed tertiary hospital.
It has five operating theatres and offers a full range of medical specialities and essential diagnostic capabilities.
The hospital employs 500 staff, including 60 doctors, and is a Joint Commission International-accredited hospital.
This purchase will be funded using internal cash resources and was an arms-length transaction, with the valuation of the hospital agreed at US$45.6 million in a valuation report by Savills Vietnam commissioned by RMG in July 2023.
RMG can utilise AIH to tap into the growing demand for private healthcare services in Vietnam and will also complement its clinic operations there.
Acquiring a majority stake in a Vietnamese hospital will also help to diversify RMG’s revenue away from Singapore and China and is part of the group’s long-term strategy to increase its geographic reach.
CEO Loo Choon Yong is optimistic about the acquisition, commenting that AIH will help to augment the healthcare player’s range of services together with its three ambulatory care facilities in Vietnam.
No transaction details were disclosed or financial numbers shared, but investors can expect some disclosure and commentary when management releases its 2023 earnings in early 2024.
Singtel (SGX: Z74)
Singtel announced that it entered into a share purchase agreement with MC2 Titanium, LLC, to sell its entire stake in Trustwave at an enterprise value of US$205 million.
Trustwave is a cybersecurity company that provides threat detection and security services to protect clients from cyberattacks.
As of 30 September 2023, Trustwave will be classified as a subsidiary held for sale and removed from Singtel’s consolidated financials.
The sale will not have a material impact on the blue-chip telco’s financials and should be completed by the fourth quarter of this year.
Parked under Singtel’s Group Enterprise business, the group’s 98% stake in Trustwave was first purchased back in 2015 for US$770 million.
The cybersecurity unit saw revenue plunge 55.7% year on year to S$163 million for fiscal 2023 ending 31 March 2023.
A loss before interest, taxes, depreciation and amortisation (LBITDA) of S$116 million was incurred.
Meta Platforms has proposed an ad-free version of its most popular products, Facebook (FB) and Instagram (IG), as it seeks to comply with a growing list of demands imposed by the European Union (EU).
The social media company is offering this option if users do not wish to be tracked for ads.
These new EU regulations are designed to curb the power of “Big Tech” and its various court decisions have caused Meta Platforms to look for ways to skirt these rulings.
A source mentioned that subscribers in Europe could pay €10 a month for the desktop version of FB and IG and around €13 a month for using the IG app on their mobile phones.
If implemented, this will be a major shift away from an advertising model where users could use the social media site for free in return for being tracked and being served highly personalised ads.
However, Meta Platforms may have no choice if it wishes to comply with an EU ruling that bans user tracking unless these users have given explicit consent.
EU’s highest court had also said back in July that users who did not wish to be tracked should be offered an ad-free alternative while paying an “appropriate fee”.
It remains to be seen if Meta Platforms will go ahead with this ad-free tier in Europe, but the new model could drastically alter its revenue flow and investors should monitor its financials for these changes.
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Disclosure: Royston Yang owns shares of Raffles Medical Group and Meta Platforms.
