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YEAR-on-year (YoY) earnings growth for KPJ Healthcare is expected to be driven by improving revenue intensity and operating metrics from hospitals under gestation.
“We continue to like KPJ for its solid turnaround story and as a key proxy to the thriving domestic private healthcare space,” said RHB.
RHB anticipates revenue intensity for outpatient and inpatient to remain stable quarter-on-quarter, while total patient volume is expected to grow at 2.6% YoY for the nine months of 2025.
Growth will be driven by a seasonally stronger second half of 2025 (2H25), supported by higher bed occupancy following the recovery in elective surgeries post festive period in 1H25. Overall net margin should improve on the back of better operating metrics from the six hospitals under gestation.
However, RHB notes the potential soft spots in 3Q25, including:
i) Higher-than-expected Sales & Service Tax impact from lease agreements (effective 1 Jul).
ii) Ongoing negotiations between insurers and specialists, which could affect case mix and billing.
iii) Weaker-than-expected performance from the newer hospitals, weighing on earnings before interest, tax, depreciation and amortisation.
Given KPJ’s domestic-focused portfolio, extensive hospital network, some of which are smaller in sizes, and larger number of independent specialists, the group remains more exposed to risks arising from insurer negotiations than peers.
“We tweak our core profit aftr tax, amortisation, and minority interest forecast by 1%, -2% and -3%, reflecting adjustments to our interest and lease expense assumptions,” said RHB.
Key risks for KPJ include lower-than-expected patient visit numbers, lower revenue intensity growth, and higher-than-expected operating costs. —Nov 10, 2025
Main image: KPJ Healthcare
The post RHB maintains positive outlook on KPJ Healthcare’s turnaround story first appeared on Focus Malaysia.
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