We Maintain Ramsay's Narrow Moat Rating on Potential Ramsay Santé Demerger

Ramsay is returning to its core Australian business after a period of global expansion. It sold its German business in 2020, Ramsay Sime Darby in 2023, and now plans to demerge its 53% stake in Ramsay Santé in 2026, subject to shareholder approval. We support the exits, as market fundamentals are generally less attractive overseas. Around 80% of Ramsay's Australian revenue comes from commercial private health insurance, or PHI, agreements, compared with around 30% or less in its other geographies. This gives the Australian business greater pricing flexibility, while publicly funded activity is generally subject to government budgets and government-set tariffs. We also see limited benefits operating globally given differing regulatory and funding regimes and the local nature of staffing, a hospital's highest cost.