To increase the number of patients at its recently constructed Damansara Specialist Hospital 2, KPJ Healthcare Bhd may be able to take advantage of medical tourism (DSH2).
This is shown in the November 2023 nomination of Sherene Azli to the position of Chief Marketing Officer within the business.
Sherene had served as the Malaysia Healthcare Travel Council's CEO for six years prior. "Shereen's experience ought to be quite helpful in boosting KPJ's income from medical tourism.
According to a report released yesterday by UOB Kay Hian (UOBKH) Research, "this will aid DSH2 in breaking even, with a continual ramp-up from its 30% medical tourism contribution to revenue target in 2023 to 50% in 2025."
According to the report, KPJ's medical tourism income is anticipated to bring in RM200 million in 2023 and is then projected to increase by 50% to 75% by 2024.
Additionally, it anticipates that the group's five loss-making hospitals—Perlis, Miri, Batu Pahat, Bandar Dato' Onn, and DSH2—will break even.
By the end of 2024, the Miri, Perlis, and DSH2 hospitals are anticipated to become profitable overall, while the other two are anticipated to become profitable operationally.
In addition, UOKBKH Research stated, "KPJ is expected to achieve its long-term earnings before interest, taxes, depreciation, and amortization margin target of 28%, compared to 2023's forecast of 23%, with the assistance of leakage plugging and cost optimization."
It stated that KPJ continues to provide extremely obvious earnings growth and that the company's short-term development should be aided by the continued gestation of its loss- making hospitals from organic patient throughput and an expected improvement in foreign medical contributions.
Based on KPJ's pre-pandemic five-year mean price-to-earnings ratio, UOBKH Research has maintained its "buy" call and raised the company's target price to RM1.75 from RM1.40 in response to the enhanced execution expectations.
It was mentioned that after the sale of the hospital in Indonesia, KPJ's Hospital and Nursing College in Bangladesh were the sole loss-making assets left. It is planned to be sold in the first half of 2024.