KUALA LUMPUR (March 26): RHB Research Institute is positive on KPJ Healthcare’s move to accept an offer to acquire an 80% stake in PT KPJ Medika, which owns and operates a 92-bed private specialist hospital in Jakarta, for RM15.8 million.
The research house said on Monday it believes the acquisition price is attractive as the purchase consideration of RM15.8 million implies a historical FY11 price-to-earnings ratio (PER) of about 8.7 times and a target FY12 PER of 7.6 times to 7.9 times, assuming FY12 earnings growth of 10%-15% for the hospital. This would be near the lower-end of its previous average acquisition PER range was 8 times to 12 times.
“FY12-14 EPS forecasts increased by 1.8%-3.1% after factoring in a higher number of patients arising from the new capacity. Fair value raised to RM5.69 (from RM5.59), based on unchanged FY12 PER of 22.5 times (in line with peers’ average),” said RHB Research.
The research house said on Monday it believes the acquisition price is attractive as the purchase consideration of RM15.8 million implies a historical FY11 price-to-earnings ratio (PER) of about 8.7 times and a target FY12 PER of 7.6 times to 7.9 times, assuming FY12 earnings growth of 10%-15% for the hospital. This would be near the lower-end of its previous average acquisition PER range was 8 times to 12 times.
“FY12-14 EPS forecasts increased by 1.8%-3.1% after factoring in a higher number of patients arising from the new capacity. Fair value raised to RM5.69 (from RM5.59), based on unchanged FY12 PER of 22.5 times (in line with peers’ average),” said RHB Research.
