Raffles Medical’s S$600M bet is still struggling to pay off

Healthcare is a long game

For most Singaporeans, Raffles Medical is a familiar name. The healthcare group has built a reputation as one of Singapore’s most established private medical providers.

But behind the scenes, the company has spent the last decade chasing a much bigger ambition.

Rather than remaining a Singapore-focused healthcare operator, Raffles Medical wanted to become a regional healthcare brand—one with hospitals and clinics stretching across Asia.

It was a bold strategy. And an expensive one.

In 2016, the group announced plans to pour around S$600 million into expanding overseas, building hospitals and clinics overseas with China as its biggest bet.

Today, however, that investment still hasn’t translated into equally impressive financial returns. While its Singapore operations are well-established and consistently profitable, its sizeable investment in China continues to lag behind.

Why China looked like an obvious market

Back in the mid-2010s, expanding into China seemed like the logical move.

The country’s population was ageing, disposable incomes were rising, and healthcare reforms were gradually opening the door to private healthcare providers.

For firms like Raffles Medical, the opportunity looked enormous.

The company wasn’t rushing into an unfamiliar market either.

According to management, senior executives had spent more than 30 years observing China’s healthcare reforms before deciding the timing was finally right to enter the country.

Rather than stopping at outpatient clinics, Raffles Medical doubled down on its China ambitions by investing in full-service hospitals.

It opened a 700-bed international tertiary hospital in Chongqing in 2019, followed by a 400-bed tertiary hospital in Shanghai in 2021. Around the same time, it also upgraded its existing Beijing medical centre into Raffles Hospital Beijing, expanding its services to include inpatient and emergency care.

Together, the projects required years of planning, construction, regulatory approvals, specialist recruitment and investment in medical equipment before they could even begin seeing patients.

Unlike retail stores or restaurants, hospitals can’t simply open their doors and expect customers to flood in.

Patients need to trust the brand. Doctors need to establish referral networks. Insurance partnerships have to be secured. Operating theatres, diagnostic equipment and inpatient wards all have to be utilised before a hospital starts generating meaningful profits.

In other words, healthcare is a long game.

The investment is huge, but so is the gap

That long game is becoming increasingly visible in Raffles Medical’s financials.

Ahead of its 2026 AGM, shareholders questioned why China’s business had grown so slowly despite years of investment. Between FY2018 and FY2025, revenue from China increased by only S$25.4 million, reaching S$65.4 million.

The disparity becomes even more striking when compared with the group’s asset base. China accounts for around 30% of Raffles Medical’s total assets, yet contributes only 10% of group revenue.

By comparison, Singapore’s asset base is only about 2.2 times larger than China’s, but generates more than 10 times the revenue.

The figures suggest that while Raffles Medical has built a sizeable presence in China, its overseas assets have yet to achieve the same level of utilisation and productivity as its mature Singapore operations.

The company says patience is part of the plan

Raffles Medical doesn’t dispute that its overseas operations are taking time. Instead, management argues that’s simply how hospital investments work.

Building a hospital isn’t the hardest part—building patient volumes is.

The group says overseas operations typically require years to develop clinical capabilities, improve utilisation and reach sufficient scale before becoming meaningfully profitable.

China has also become a tougher operating environment than many expected. The company cited geopolitical tensions, technological restrictions and broader economic challenges as factors weighing on its performance.

Even so, management continues to view China as a strategic market, pointing out that around 30% of the country’s population can already afford higher-quality healthcare, giving it a sizeable addressable market.

More importantly, Raffles Medical has gradually secured access to China’s public insurance system, allowing it to treat more local patients instead of relying primarily on expatriates—a key milestone that could improve patient volumes over time.

China was the exception, not the rule

Despite more than a decade of overseas expansion, Singapore still remains Raffles Medical’s financial backbone. In FY2025, the group’s local operations generated nearly 90% of its revenue, effectively funding its regional ambitions while newer markets continue to mature.

Not all of its overseas markets, however, have followed the same playbook.

While China saw Raffles Medical invest heavily in building full-fledged tertiary hospitals, its expansion elsewhere has been far more measured.

In markets such as Vietnam, Cambodia and Japan, the group has focused on outpatient clinics, specialist centres and partnerships with local healthcare providers instead of embarking on similarly capital-intensive hospital projects.

That more cautious approach is reflected in its balance sheet. As at FY2025, Raffles Medical’s non-current assets in Greater China stood at about S$304 million, compared with just S$13.4 million across the rest of Asia.

This makes China the group’s biggest regional bet and the market that will likely determine whether its international expansion ultimately pays off.

So, was the gamble worth it?

Hospital investments are unlike most businesses. They take years to generate sustainable returns, but there are signs that Raffles Medical’s China operations are beginning to gain traction.

In FY2025, both its Shanghai and Chongqing hospitals reported higher patient volumes, while Shanghai also recorded revenue and profit growth. The group has also expanded partnerships with leading public hospitals and secured access to China’s National Health Insurance Programme for its Shanghai hospital, moves aimed at broadening its local patient base.

Still, there’s no denying that its financials are still catching up.

If Raffles Medical succeeds in improving utilisation and profitability, years of investment could prove worthwhile. If not, its China expansion could become a costly reminder that succeeding overseas is much harder than replicating a proven business model.

For now, Raffles Medical appears committed to seeing the strategy through.

After spending a decade—and hundreds of millions of dollars—building its regional footprint, turning back is no longer really an option.

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Featured Image Credit: Raffles Medical Group