Thomson Medical Group Ltd: Mixed Performance Amid Strategic Transformation February 25, 2026
Company Overview
Thomson Medical Group Ltd is a healthcare provider operating across Singapore, Malaysia, and Vietnam, focusing on medical services including inpatient and outpatient care, with expanding specialties in oncology, orthopaedics, spinal care, and emergency services.
Financial Performance Below Expectations
Thomson Medical Group’s first-half results for FY26 presented a mixed picture, with revenue meeting expectations at 49% of full-year forecasts but profitability falling short. The company reported a narrowed net loss of S$10.2 million, representing a 21% improvement due to reduced interest expenses. However, EBITDA performance disappointed at only 38% of annual projections, prompting analysts to lower full-year EBITDA estimates by 17% to S$84 million.
The Positive: Malaysia’s Remarkable Turnaround
The standout performance came from Malaysia operations, which delivered a dramatic transformation. Revenue surged 29% year-on-year to S$64 million, driven by substantial increases in average bill sizes for both inpatients (+18%) and outpatients (+57%). EBITDA experienced an impressive 73% year-on-year spike to S$11.5 million, whilst profit after tax and minority interest jumped five-fold to RM10.9 million. This turnaround was attributed to operating leverage benefits, with staff costs remaining stable despite revenue growth. The arrival of Oncocare services and increased medical tourism were key drivers of this exceptional performance.
The Negative: Singapore Faces Cost Pressures
In contrast, Singapore operations struggled with cost management challenges. Revenue remained flat during the first half, with bed occupancy rates at 50%. EBITDA margins contracted due to elevated operating and staff costs, despite a 22.6% year-on-year increase in average inpatient bill sizes. The introduction of more complex specialty cases, including orthopaedics, oncology, spinal, and emergency care services, contributed to higher revenue per patient but was offset by increased operational expenses.
Revised Outlook and Recommendation
Phillip Securities Research has downgraded its recommendation from BUY to ACCUMULATE, reflecting the mixed operational performance. The target price has been reduced to S$0.071 from the previous S$0.074, incorporating lower earnings projections. A net loss of S$18.9 million is expected for FY26, with raised depreciation estimates contributing to the revised outlook. The development of the Johor land bank remains pending, subject to review of multiple proposals. Whilst the turnaround strategy shows promise with increasing case complexity and revenue intensity, additional upfront costs and investments have impacted near-term profitability.
Frequently Asked Questions
Q: What were the key highlights of Thomson Medical Group’s first-half results?
A: Revenue met expectations at 49% of full-year forecasts, but EBITDA disappointed at 38% of projections. Net loss narrowed by 21% to S$10.2 million due to lower interest expenses.
Q: How did Malaysia operations perform compared to Singapore?
A: Malaysia delivered exceptional results with 29% revenue growth and 73% EBITDA increase, whilst Singapore revenue remained flat with declining EBITDA margins due to higher costs.
Q: What drove the improvement in Malaysia’s performance?
A: The turnaround was driven by Oncocare’s arrival, increased medical tourism, and significant jumps in average bill sizes for inpatients (+18%) and outpatients (+57%).
Q: Why did Singapore operations struggle despite higher bill sizes?
A: Although average inpatient bill sizes increased 22.6% due to more specialty cases, this was offset by higher operating and staff costs, resulting in margin compression.
Q: What is Phillip Securities Research’s current recommendation?
A: The recommendation has been downgraded from BUY to ACCUMULATE, with a reduced target price of S$0.071 (previously S$0.074).
Q: What are the key factors affecting the company’s outlook?
A: The outlook is influenced by ongoing turnaround efforts in Singapore and Malaysia, pending Johor land bank development, and the impact of upfront investments on near-term profitability.
Q: How has the company’s financial guidance changed?
A: FY26 EBITDA estimates were lowered by 17% to S$84 million, with an expected net loss of S$18.9 million due to higher depreciation estimates.
This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.
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About the author
Paul Chew
Paul has more than 25 years of experience as a fund manager and sell-side analyst. He currently covers sectors such as healthcare, electronics, telecommunications, conglomerates, small caps, and strategy.
He graduated from Monash University and has completed both his Chartered Financial Analyst and Australian CPA programme.
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