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OSK keeps buy' call on KPJ Healthcare

KUALA LUMPUR: KPJ Healthcare Bhd’s ongoing expansion will reinforce its position as Malaysia’s leading private healthcare services provider and enable it to tap the under-served markets, according

02-01-2012

KUALA LUMPUR: KPJ Healthcare Bhd’s ongoing expansion will reinforce its position as Malaysia’s leading private healthcare services provider and enable it to tap the under-served markets, according to a local research house.

OSK Research has maintained its "buy" recommendation at an unchanged future value of RM5.21.

It said the potential listing of Parkway-Pantai will be the positive valuation re-rating catalyst for the sector, where KPJ Healthcare will be a prime beneficiary.

It said construction on the Bandar Baru Klang Specialist Hospital was recently completed and it is expected to start operating by the first quarter of financial year 2012.

At the same time, four of KPJ Healthcare’s new hospitals are currently under construction, while work on another three is expected to start this year.

KPJ Healthcare is also on the lookout for potential acquisitions as part of its expansion strategy.

"It's goal of achieving RM2 billion revenue for 2012 is highly achievable due to the increase of patient capacity and higher facilities utilisation." OSK said in a note.

It said the innovative use of Real Estate Investment Trust as a vehicle to recycle its capital will help sustain KPJ Healthcare’s growth ambitions without straining its balance sheet.

The company will focus on the education segment as a second core business since it believes that education business should provide meaningful earnings in the long run.







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