Government hospitals now lack manpower and good service. Private hospitals like this one, with a huge private sector base (this being on panels of most multinationals and GLCs), should do well by default.
We raise FY23F/24F core EPS by 18%/16% to factor in lower opex and other housekeeping adjustments post-FY22 results. Following our earnings upgrade, we raise KPJ’s TP by 12% to RM1.32, based on an updated CY24F P/E of 31x (10-year mean, vs. 32x previously). While share price rose 34% from its 1-year low at end-Sep 22, its FY23F P/E of 26.2x is still 17% (0.5 s.d.) below its 10-year historical mean. Potential re-rating catalysts: full earnings recovery, rising health tourism contributions and improving ROIC. Key downside risks: severe Covid-19 waves and longer gestation for its new hospitals.
Chairman at ystd AGM said he wasn't aware of any pte equity to buy a stake in KPJ. How can he be not aware of as it was in the news and vol of shares has been historical. Such a sweeping statement did not sound very professional.
RHB call BUY on KPJ Healthcare, Target Price RM1.46
Keep BUY and MYR1.46 TP, 25% upside. 2Q23 core profit surged 61% YoY, bringing KPJ Healthcare’s 1H23 core earnings to account for 40% and 43% of our and Street’s expectations. Our DCF-derived TP represents 18x 2024F P/E, 0.8SD below its 5 year historical average of 33x. KPJ is now trading at -1SD below its 5-year mean, which we deem unjustified, given its organic domestic expansion, gradual pick-up in health tourism revenue, and divestment of loss-making foreign assets.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....