Global Alpha Capital Management has increased its deemed stake in Raffles Medical Group. On May 5, the Montreal-based fund manager paid $1.21 each for 761,300 shares on the open market, raising its total holdings to just over 148.9 million shares, equivalent to 8.017%, up from 7.976% previously.
Global Alpha Capital Management holds the Raffles Medical shares via various funds it manages on behalf of clients. Raffles Medical has been buying back its own shares too, most recently on May 10 when it paid $1.14 each for 700,000 shares.
This was the company’s first buyback following the renewal of its mandate by shareholders at the AGM on April 25. Before April 25, the company had bought back one million shares on April 19; 160,000 shares on April 14; 140,000 shares on April 12; and 183,500 shares on April 4. For the better part, Raffles Medical bought these shares back at $1.16 each, although some were at as high as $1.20. The company was steadily buying back shares in March too.
Executive chairman Dr Loo Choon Yong, who founded the company in 1976, also added to his stake recently by buying from the open market. The most recent transaction filed was on March 23, when he paid $1.14 for 500,000 shares. This brings his direct interest to 200.46 million shares, equivalent to 10.771%. In addition, Loo holds a deemed interest in another 783.8 million shares, giving him a total interest of around 984.3 million shares, or 52.889%.
For the FY2021 ended December 2021, Raffles Medical enjoyed a banner year. Its earnings reached $83.7 million, up 29.5% over FY2020, thanks to income boost from providing pandemic-related services such as testing and vaccination. Going forward, analysts are expecting the company’s earnings to “normalise”. While the Covid-related revenue will taper off, previously postponed elective surgery might come back, and so will the broader medical tourism market.
Coal boom
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Lenny Limanto, a substantial shareholder of coal miner Geo Energy Resources, has unloaded another tranche of shares into the open market. On May 6, she sold just over 4.3 million shares at 52.6 cents each. That leaves her with just below 82.7 million shares, equivalent to 5.87%, down from 6.17% earlier. Before this, Limanto, who holds her shares via an entity called Cheng Xin Investment, sold around 5.2 million shares at 54.8 cents each on March 4.
Besides Limanto, the company’s lead independent director, Soh Chun Bin sold recently as well. On April 13, Soh, who is with Zico Insights Law, sold 250,000 shares at 56 cents each. He is left with one million shares. Soh joined Geo Energy’s board in 2012.
Geo Energy is riding on a global commodities boom, achieving record earnings for FY2021 ended December 2021. Year to date, its share price has gained by half on the back of higher coal prices. It hit a recent peak closing price of 58 cents on April 21. It recently paid a final dividend of 5 cents per share, bringing the total paid for FY2021 to 9 cents.
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In a market update on March 7, Geo Energy noted that Russia’s invasion of Ukraine has further lifted already high coal prices. Newcastle coal, one of the industry benchmarks, broke through the US$400 ($554.8) per tonne mark, more than double since the start of this year. Geo Energy is targeting a production of five million to six million tonnes in 1HFY2022 and expects to achieve revenue of more than US$400 million and operating earnings of close to US$200 million in 1HFY2022.
The company, which is trading at a historical P/E of 2.58x, says that its shares continue to be “undervalued”. It expects coal demand to reach an all-time high in 2022 and continue until 2024, led by higher demand from emerging and developing economies.
