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The Edge, Monday, 18 July 2011


Long before articles were published about the benefits of having women at decision-making levels in a company. Datin Paduka Siti Sa'diah Sheikh Bakir was providing evidence of the fairer sex's ability with her skillful handling of KPJ Healthcare Bhd. On her watch. KPJ Healthcare Bhd has grown from two hospitals when it was listed in 1994, into the nation's leading private-healthcare service provider with 20 hospitals in Malaysia. In fact, not only does KPJ have a 24% market share in Malaysia's private-healthcareservices sector, it is now being increasingly used as the sector's benchmark, according to TA Securities, in a research note dated Dec 2, 2010. Equally important, perhaps, KPJ's shareholders are getting valuable returns on their investment. The company saw a compound annual growth rate (CAGR) of 23.8% for its net profit between 2006 and 2010, and 14.8% for revenue in the same period. The movement in its share price has been equally heartening, and its sterling returns to shareholders of 55.1% annually over the past three years won it The Edge Billion Ringgit Club award for Best Performing Stock within the combined Trading/Services, Hotels. IPC and Technology sectors. But that's not the end of the growth story, As Siti Sa'diah, KPJ's managing director, puts it, the group's ongoing expansions will continue to spur growth in line with the strategy of adding one or two new hospitals each year. "We will continue to expand the hospital network in Malaysia, reach out to new markets within the country and increase market reach abroad through health tourism activities," she tells The Edge. KPJ is currently in the process of completing a new hospital. KPJ Klang, which will be opened to the public in 4Q, and three other hospitals in Muar, Pasir Gudang and Tanjung Lumpur in Kuantan next year. "With the facilities and infrastructure available in Malaysia, including in KPJ's full-fledged specialist hospitals, we are not only able to retain local patients in the country. but also to contribute to the nation's efforts of bringing in medical tourists from abroad," says Siti Sa'diah. As at end-2010, KPJ had seen some 12,000 health tourists pass through its doors, bringing in a revenue of almost RM25 million, "We also hope to develop our education arm. KPJ International College of Nursing and Health Sciences, into a renowned education centre and a university college for nursing, medical-related studies and related management services," she adds. Despite all this, KPJ's growth story really lies in its innovative healthcare real estate investment trust (REIT). In 2006, KPJ embarked on a corporate exercise to inject six of its hospitals into the Al-'Aqar REIT, which is the first Islamic and healthcare REIT here. The exercise has not only helped KPJ to unlock the value of its assets, it also freed up its cash flow by allowing it to receive good rental yields from its hospitals. As such, KPJ continues to inject its new hospital buildings into this REIT. To date, there are 20 hospital buildings and one college building in the REIT, totalling RM1.1 billion in assets. THE COMPANY KPJ Healthcare Bhd (KPJ) is a homegrown private-healthcare services provider with a network of 20 hospitals located in Malaysia, 10 of which are accredited by the Malaysian Society for Quality in Health (MSQH). It also has two hospitals in Indonesia. The KPJ group opened its first hospital on May 10, 1981, in Johor Baru, which was followed by its venture into Kuala Lumpur and Perak via the acquisition of Tawakal Hospital in 1988 and lpoh Specialist Hospital in 1989. KPJ was officially listed on Nov 29, 1994. In 2002, KPJ undertook an internal restructuring exercise to consolidate and streamline the group's healthcare activities, and became Malaysia's largest privatehealthcare services provider. It has 800 medical specialists and more than 8,000 employees, catering to two million patients annually, both local and foreign. KPJ's primary market today is the domestic Malaysian market, although the group is actively extending its reach into the Asian, Australian and Middle Eastern markets as well. The group has achieved more than RM1billion in turnover since 2007, and has been listed among the Top 100 Companies on Bursa Malaysia since 2009, with a market capitalisation of more than RM2 billion and revenue of RM1.6 billion. ABOUT THE MANAGING DIRECTOR Dalin Paduka Siti Sa'diah Sheikh Bakir has been KM Healthcare Bhd's managing director since 1993. Prior to that, she was with Johor Corporation Bhd (JCorp) and was directly involved with JCorp's Healthcare Division from 1978. She was appointed CEO of Kumpulan Perubatan (Johor)Sdn Bhd (KRISB) in 1989 and remained CEO until KRI's listing on the Main Board of Bursa Malaysia in 1994. Besides being the chairman of MIT Insurance Brokers Sdn Bhd, she is also a director of Kulim (Malaysia) Bhd, KFC Holdings (Malaysia) Bhd, QSR Brands Bhd and Damansara