RHB Investment Bank Bhd (RHB Research) has initiated coverage on Sunway Healthcare Bhd with a BUY rating and a target price of RM2.14, citing strong earnings growth visibility, a differentiated integrated healthcare model and expectations of sustained expansion momentum, while highlighting its premium valuation as justified by superior margins, execution strength and above-peer growth trajectory.
The research house described Sunway Healthcare as the fastest-growing premium asset within its healthcare coverage, supported by its five-hospital network anchored by Sunway Medical Centre in Sunway City Kuala Lumpur. It said the group’s focus on high-value medical specialities including cardiology, oncology, neurology, gastroenterology and orthopaedics continues to drive higher bill sizes and increasing foreign patient inflows.
RHB Research also pointed to Sunway Healthcare’s vertically integrated ecosystem as a key competitive advantage, noting that the structure reduces demand risk typically associated with new hospital developments. It added that strong relationships with insurers further enhance patient throughput, strengthening its position in the private healthcare market.
According to RHB Research, Sunway Healthcare has demonstrated above-average execution capability, with all its tertiary hospitals achieving EBITDA positivity within the first 12 months of operation. The research house said this rapid ramp-up performance supports its expectation of a 22.2% EBITDA compound annual growth rate between 2025 and 2028F, more than double the local peer average.
RHB Research forecast a 25.9% compound annual growth rate in PATAMI over the same period, driven by new hospital ramp-ups and brownfield expansion at existing facilities. It noted that potential upside from tax incentives has not been fully factored into forecasts.
The research house said its DCF-derived target price of RM2.14, which includes a two per cent ESG premium, implies a FY27F EV/EBITDA of 30.6 times. It added that while this represents a premium to regional peers, it reflects Sunway Healthcare’s strong brand positioning, defensive earnings profile and structural growth outlook.
As of 11.22 am, the stock price rose 1.10% to RM1.83.
