HLIB Research remains “overweight’’ on the local healthcare sector for 2024.
PETALING JAYA: The local healthcare sector can expect sustained growth in the second half of this year (2H24) and beyond.
This will be boosted by the fortification of established hospital assets and ongoing growth in medical tourism across most continents. By 2026 and 2027, two sizeable hospital initial public offerings (IPOs) are expected and this could lead to a re-rating potential for existing players such as IHH Healthcare Bhd
and KPJ Healthcare Bhd.
Hong Leong Investment Bank (HLIB) Research believes the IPOs will be valued at least 20 times enterprise value and earnings before interest tax depreciation and amortisation (Ebitda).
This could prompt investors to scrutinise the valuation divergence versus IHH and KPJ in 2026 onwards, with IHH being the major beneficiary.
HLIB Research remains “overweight’’ on the local healthcare sector for 2024 with IHH as its top pick, as it believes its share price will experience a structural uptrend in coming years.
It was reported that a new mega entity (owned by US-based TPG Capital and Hong Leong Group) consists of Columbia Asia Healthcare, Ramsay Sime Darby Health Care, Beacon Hospital, Cardiac Vascular Sentral Kuala Lumpur, ALTY Orthopaedic Hospital and PJ Integrated Centre of Advanced Surgery and Oncology, could be listed in 2026 on Bursa Malaysia.
This new entity currently has a total bed capacity of 4,275 with operations spanning across Malaysia, Indonesia and Vietnam.
Separately, Sunway Healthcare Group (SHG) is expected to be listed by October 2027, based on the shareholder agreement signed between Sunway and GIC Private Ltd. SHG currently has a total bed capacity of 1,158 licensed beds.
HLIB Research said among the two (IHH and KPJ), IHH has the potential to distinguish itself due to its geographical diversification across nations in Singapore, Malaysia, Turkiye, Europe and India, enabling the group to capitalise on growth in a number of countries.
