RHBInvest Research

Healthcare:

Sector Update

• Sime Darby Healthcare Group is set to establish two new specialist hospitals in Ara Damansara and ParkCity respectively.
• We believe the opening of two new hospitals will not have a significant impact on KPJ. KPJ’s Damansara Specialist is well established and currently operating at full capacity.
• We reiterate our Outperform call on KPJ (FV=RM4.94) given its stable growth profile and relatively inexpensive valuations compared to regional peers. We remain positive on Malaysia’s healthcare industry as healthcare remains an integral part of the Government’s initiative to develop Malaysia as a high income nation by 2020. However, given our more cautious view on the rubber glove players, we maintain our Neutral call for the sector.