Ihh vs Kpj

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Home - Business

IHH, KPJ still market leaders in healthcare

Posted on January 22, 2013, Tuesday

AGGRESSIVE EXPANSION: RHB Research expects KPJ to maintain its dominance in in Malaysia given its aggressive expansion plans of two to three hospitals per annum, which would see the company grow its number of beds by 1,180 over the same period.

KUCHING: The local healthcare sector has benefitted from the listing of Integrated Healthcare Holdings Bhd (IHH) last year as well as continuous efforts by KPJ Healthcare Bhd (KPJ) to further expand regionally.

“IHH’s listing in end July 2012 has benefitted the healthcare sector, lifting average peers’ valuations to 26.6 times for calendar year 2013 (CY13) price earnings ratio (PER) currently from 23.5 times CY12 PER at end of July 2012,” highlighted the analytical team at RHB Research Institute Sdn Bhd (RHB Research) in a report yesterday.

“While its share price has performed relatively well –gaining 13 per cent since its listing day (against 3.4 per cent for the FBM KLCI) – KPJ’s share price declined by 5.6 per cent during the same period,” added the research firm.

RHB Research believed this was caused by some switching activities from KPJ to IHH.

Meanwhile, in other developments, IHH’s operation in Malaysia continued to reap higher revenue per in-patient due to its superior brand position, advanced medical capabilities and a higher mix of high-end treatment procedures.

“This is reflected in its higher CY11 revenue per in-patient of approximately RM6,188 compared with RM5,699 for KPJ,” outlined RHB Research.

“Based on our estimates, the 8.6 per cent premium (above KPJ) enjoyed by IHH could increase to approximately 10.1 per cent by 2015, as IHH continues to push for higher revenue intensity by adopting a ‘Hub and Spoke’ business model. By diverting and focusing financial...