MIDF noted in its briefing that KPJ Healthcare Berhad 4QFY23 earnings came in within earnings estimates at 95%, and above consensus’ estimates at 103% and that it maintains its BUY call given the company’s continuous robust performance of its Malaysian front.
Additionally, the house is expecting earnings to improve at a faster pace in in FY24, in line with an expected increase in healthcare services demand from the growing aging population and higher revenue for medical tourism, which subsequently translates to higher BOR, inpatient visits, treatments and surgery demand. MIDF said it is also revising its earnings forecast
and target price to RM2.30 (previously RM2.12) on this basis. 4QFY23 earnings up +14%yoy. KPJ’s 4QFY23 earnings added
+13.7%yoy to RM83.5m. The higher earnings were due to improved hospital activities in Malaysia segment, partially offset by a RM6.8m impairment loss on the retirement village business’ investment property in Australia.’
4QFY23 revenue up +19%yoy. Meanwhile, revenue was up by +19%yoy to RM911.5m. This is attributable to a +4%yoy increase in patient visits to 857,537 in 4QFY23, supported with the higher number of beds by +6%yoy to 3,643. The bed occupancy rate (BOR) also increased from 64% to 69%.
Improved Malaysian segment by new hospitals. 4QFY23 earnings up +3.9%yoy to RM92.9m, while revenue gained +18.5%yoy to RM892.3m. Patient visits increased by +4%yoy to 808,050 patients along with the increase in surgery cases by +6%yoy to 99,473 cases, and inpatient days up by 29,380 days evidenced by the higher BOR to 67% as compared to 58% in FY22. KPJ Damansara 2, KPJ Penang and KPJ Puteri registered the highest revenue increase, as they are newly opened hospital and building blocks. The higher earnings were also contributed mainly from the gain on disposal of the group’s Indonesian operations in FY23.
KPJ Dhaka and KPJU added for others segment. This segment included: (i) the retirement village in Australia operated by Jeta Garden, (ii) education services by KPJ Healthcare University (KPJU), and (iii) hospital and management services by KPJ Dhaka. Collective earnings for 4QFY23 added +21.1%yoy to a deficit of RM7.7m, while revenue added +26.6%yoy to RM19.9m. The improved earnings and revenue were contributed by KPJ Dhaka and KPJU.
Looking into 2024, the house is of view KPJ is poised to remain robust and remain positive for its prospects in FY24, on the basis that its focus on its Malaysian hospitals will ensure an efficient operation, while giving more room to expand its operations with more premium offerings for its patients.
