KPJ poised for sustained growth on rising demand for healthcare services, medical tourism growth, say analysts
KUALA LUMPUR (Feb 19): Analysts are bullish on KPJ Healthcare Bhd’s prospects, driven by rising demand for healthcare services and inpatient admissions, growth from medical tourism as well as ongoing efforts to hire more consultants in line with hospital expansion.
“We continue to like KPJ’s efforts in identifying and optimising underperforming assets, coupled with improvements in routine business operations and processes. The group’s ongoing capacity expansion and strategic emphasis on medical health tourism positions it well for premium pricing, enhancing revenue intensity and economies of scale to counter inflationary pressures,” said PublicInvest Research.
“With favourable demographic trends, including an ageing population and a growing middle-income segment, KPJ is poised for sustained growth, driven by heightened demand for specialised healthcare services and improved accessibility,” it said in a note.
Kenanga Investment Bank Bhd in a separate note said that KPJ’s patient throughput will increase by 9% to 72% in the financial year ending Dec 31, 2024 (FY2024) from 67% in FY2023, driven by revenue intensity resulting from the recovery in demand for elective surgeries.
Assuming a lower effective tax rate of 28% and a higher bed occupancy rate of 72%, the research house raised its forecasts for KPJ’s net profit by 6% for FY2024 and 5% for FY2025.
“Correspondingly, we lift our target price (TP) by 5% to RM1.95 (previously RM1.86), based on 28 times FY2025 forecast earnings per share (EPS), in line with its regional peers,” said Kenanga.
Meanwhile, according to MIDF Research, KPJ is poised to sustain a positive trajectory supported by the opening of the KPJ Damansara 2 Hospital, which is the group’s first smart infrastructure and equipped with a 300-bed capacity, as well as the renovations in planning for its hospitals to realise the group’s target of adding an additional 400 beds in 2024.
“We adjust our earnings forecasts by 9% for FY2024 and 1% for FY2025, in addition to adjustments to our valuation with FY2023 results and expectations of more capacity for income from the group’s planned additions to its bed occupancy rate,” MIDF said. The research house raised its TP to RM2.30 (from RM2.12), implying a price-earnings ratio of 26.5 times based on EPS of 8.7 sen forecast for FY2024.
Meanwhile, RHB Research also raised its earnings estimates by 10% for FY2024 and 9% for FY2025, with a higher TP of RM1.86 (from RM1.66), as KPJ still has room for growth supported by its strategic upscaling exercise and space to scale operating efficiency from hospitals under the gestation period.
“Our discounted cash flow-derived TP represents 13 times FY2024 forecast enterprise value/earnings before interest, taxes, depreciation, and amortisation (EV/Ebitda), one standard deviation above its five-year historical EV/Ebitda average of 12 times (narrowing its EV/Ebitda valuation gap against IHH Healthcare Bhd (‘buy’; TP: RM6.90),” RHB added.
At the time of writing on Monday, KPJ’s share price had inched up one sen or 0.61% to RM1.64, giving it a market capitalisation of RM7.42 billion.
News Related
-
Window opens for Zahid to ride off into the sunset – but at Anwar’s cost Sources within Umno have not ruled out strong speculation since last month about a so-called “exit plan” for Ahmad Zahid Hamidi, a move that could pave the way for his political retirement having survived more ...
See Details:
Window opens for Zahid to ride off into the sunset – but at Anwar's cost
-
Brianna Ghey died after she was found with fatal stab wounds in a park Two teenagers accused of murdering Brianna Ghey showed a “preoccupation” with “violence, torture and death”, a court has heard. The body of Brianna, 16, who was transgender, was discovered by dog walkers in a park in ...
See Details:
Murder-accused teens 'had preoccupation with torture'
-
ISLAMIC REVOLUTIONARY Guard Corps Commander-in-Cheif Major General Hossein Salami speaks at an anti-Israel protest in Tehran on Saturday. The IRGC trained Hezbollah to use human shields, say the writers. The conflict in Gaza has raised a deeply troubling issue: Reports suggest that Hamas is deliberately using civilians as shields, a ...
See Details:
A plea for Islamic voices against using human shields - opinion
-
Photo for illustration purposes only. – BERNAMA FILE PIX SHAH ALAM – The government needs to strengthen the Malaysia My Second Home (MM2H) programme, especially with the exemption of visas for Chinese and Indian citizens visiting the country starting Dec 1. Universiti Tun Abdul Razak economic expert Emeritus Professor Dr ...
See Details:
Strengthen MM2H programme, promote multiple entry visa
-
GEG element removed from anti-smoking Bill KUALA LUMPUR: The generational end-game (GEG) element has been removed from the revised Control of Smoking Products for Public Health 2023 Bill tabled for the first reading in the Dewan Rakyat on Tuesday (Nov 28). This is as the Health Ministry tries for the ...
See Details:
GEG element removed from anti-smoking Bill
-
-
-
KUALA LUMPUR (Nov 28): National carrier Malaysia Airlines Bhd has launched its year-end sale with ticket prices starting from RM79 to domestic destinations and from RM229 to international destinations, for travellers who book flights between Nov 28 and Dec 11 this year. In a statement, Malaysia Airlines said all-in one-way Economy Class ...
See Details:
Malaysia Airlines launches year-end sale
-
KUALA LUMPUR (Nov 28): National carrier Malaysia Airlines Bhd has launched its year-end sale with ticket prices starting from RM79 to domestic destinations and from RM229 to international destinations, for travellers who book flights between Nov 28 and Dec 11 this year. In a statement, Malaysia Airlines said all-in one-way Economy Class ...
See Details:
Dr M accuses govt of bribery over allocations
-
KUALA LUMPUR (Nov 28): National carrier Malaysia Airlines Bhd has launched its year-end sale with ticket prices starting from RM79 to domestic destinations and from RM229 to international destinations, for travellers who book flights between Nov 28 and Dec 11 this year. In a statement, Malaysia Airlines said all-in one-way Economy Class ...
See Details:
Malaysia to check if the Netherlands still keen to send flood experts
-
KUALA LUMPUR (Nov 28): National carrier Malaysia Airlines Bhd has launched its year-end sale with ticket prices starting from RM79 to domestic destinations and from RM229 to international destinations, for travellers who book flights between Nov 28 and Dec 11 this year. In a statement, Malaysia Airlines said all-in one-way Economy Class ...
See Details:
Appeals court to rule in Isa’s graft case on Jan 31
-
KUALA LUMPUR (Nov 28): National carrier Malaysia Airlines Bhd has launched its year-end sale with ticket prices starting from RM79 to domestic destinations and from RM229 to international destinations, for travellers who book flights between Nov 28 and Dec 11 this year. In a statement, Malaysia Airlines said all-in one-way Economy Class ...
See Details:
Elephants Trample On Axia With Family Of Three Inside
-
KUALA LUMPUR (Nov 28): National carrier Malaysia Airlines Bhd has launched its year-end sale with ticket prices starting from RM79 to domestic destinations and from RM229 to international destinations, for travellers who book flights between Nov 28 and Dec 11 this year. In a statement, Malaysia Airlines said all-in one-way Economy Class ...
See Details:
Sirul fitted with monitoring device
-
KUALA LUMPUR (Nov 28): National carrier Malaysia Airlines Bhd has launched its year-end sale with ticket prices starting from RM79 to domestic destinations and from RM229 to international destinations, for travellers who book flights between Nov 28 and Dec 11 this year. In a statement, Malaysia Airlines said all-in one-way Economy Class ...
See Details:
Nigerian airliner lands at wrong airport
OTHER NEWS
THOSE looking for fresh produce may find themselves spoilt for choice at the biggest wet market in Klang, but visitors to the place say the condition of the facilities and ...
Read more »
Olive Grove is the first-ever gated-and-guarded development in Bercham, Ipoh with 24-hour security. IPOH: YTL Land and Development Bhd announced that Phase 1 of Olive Grove is fully sold while ...
Read more »
Screenshots of a video showing a teenager pointing a knife at an elderly e-hailing driver. PETALING JAYA: Police have arrested a 13-year-old boy for holding an elderly e-hailing driver at ...
Read more »
Sprint Highway’s Semantan To KL Slip Road Fully Closed Until Dec 31 If you’re a regular user of the Sprint expressway, you’ll need to do some planning for your trips ...
Read more »
Genshin Impact Version 4.3 Leak Showcases Update to Domains New leaks reveals a quality-of-life update to Domains in Genshin Impact, making it easier for players to repeat and farm resources. ...
Read more »
CG Computers will host the Urban Republic (UR) Warehouse Clearance from 30 November to 3 December at the Atria Shopping Gallery in Petaling Jaya. During the event, visitor can get ...
Read more »
Photo for illustrative purposes only – 123RF KUALA LUMPUR – Hyperinflation has never happened in Malaysia and the government hopes it will never happen, according to the Economy Ministry. It ...
Read more »