RHB Investment Bank Bhd (RHB Research) maintained its BUY call on KPJ Healthcare (KPJ) with a RM3.77 target price, implying 23% upside, as it expects stronger patient volumes, revenue intensity and margins to lift 2Q26 earnings.
RHB Research expects KPJ to post core net profit of about RM92 million for 2Q26, up 16% year-on-year and 28% quarter-on-quarter, bringing 1H26 earnings to around RM163 million or 40% of its full-year forecast. It said earnings should strengthen further in 4Q, given KPJ’s domestic-focused portfolio and lower exposure to medical tourism.
The research house expects higher bed occupancy following festive-season softness to support margin recovery, partly offset by continued investment in IT and digital infrastructure.
KPJ has also launched its third centre of excellence at KPJ Penang Specialist, focused on orthopaedic and rheumatology services, as part of its planned 15-centre rollout. RHB Research said the expansion should strengthen clinical capabilities and support higher revenue intensity over the longer term.
Despite KPJ’s share price retreating about 13% from its 52-week high, RHB Research said the stock now trades at around 14.7 times EV/EBITDA, making it a more attractive entry point. It added that KPJ’s scale should support procurement efficiencies and margins, while the group remains positioned to benefit from the upcoming MediAsas rollout.
As of 11.25 am, the stock price has slid 1.30% to RM3.03.
