KPJ Healthcare Berhad

The Star : RHB Research maintains Outperform on KPJ Healthcare

RHB Research Institute is maintaining its Outperform recommendation on KPJ Healthcare but reduced the fair value to RM6.86 from RM6.92.

KUALA LUMPUR: RHB Research Institute is maintaining its Outperform recommendation on KPJ Healthcare but reduced the fair value to RM6.86 from RM6.92.

It said on Tuesday the slightly lower fair value was based on an unchanged target CY13 PER of 23.5 times.

“We remain positive on the stock as we expect interest in the healthcare sector to remain buoyant. Maintain Outperform,” it said.

RHB Research said at its recent visit, management stated that it plans to convert part of the old KPJ Tawakal Specialist Hospital into an aged care and rehabilitation centre over the next two years.

“We are positive on the new setup as it would create the first large-scale aged care service offering in Malaysia and also provide KPJ with a new revenue stream,” it said. RHB Research said while competition in Malaysia's private healthcare sector has been heating up with most major players aggressively expanding capacity, KPJ has set an internal target of opening two new hospitals annually, that would help the company maintain its dominance in the local healthcare sector.