Financial news: IHH Healthcare’s RM1.5 billion profit and KPJ Healthcare’s RM500mil capex
Ageing population and access to quality healthcare
The world, especially the more advanced nations are all having ageing population themes. Even Malaysia is becoming an ageing nation. The demand for quality healthcare is thus growing by leaps and bounds and we can see this in Malaysia where the private hospitals are usually full and Malaysia is also a favourite destination for many when it comes to medical tourism. We have both quality and affordability especially when compared to many much more advanced nations
An old friend’s daughter was working in the US. Recently, she needed medical treatment and after checking out the medical procedure prices there in America, she flew all the way back to Malaysia to get the treatment instead. In other words, it is still cheaper after taking into account the flight costs. It will just get more expensive whether in America or here in Malaysia. This is also fueling more supply for such services too.
Article in themalaysianreserve.com IHH group COO Joe Sim Heng Joo said the company will add over 2,000 new beds across Malaysia, India and Turkiye over the next three years to meet growing healthcare needs and demand both domestically and from the region. Specifically for Malaysia he said, “We will pursue organic growth in Malaysia by driving bed occupancy and increasing our capacity by adding another 600 beds over the next three years.”
IHH operates a network of 83 hospitals in 10 countries, including Malaysia, Singapore, India, Turkiye, China and Europe. The group offers over 15,000 medical beds and hosts over 65,000 workers. Among hospital brands under the company include Gleneagles, Parkway, Pantai, Mount Elizabeth, Acibadem, Fortis and Prince Court.
Dually-listed on Bursa Malaysia and Singapore Exchange, IHH’s market capitalisation is RM51.6 billion as of May 5, 2023. Japanese investor Mitsui & Co Ltd owns the majority stake in IHH at 33%, while Khazanah Nasional Bhd, through Pulau Memutik Ventures Sdn Bhd, and the Employees Provident Fund (EPF) own 26% and 10% respectively.
For the financial year ended Dec 31, 2022, IHH registered a net profit of RM1.55 billion on the back of RM18 billion in revenue.
Please do read a comprehensive article here: Article in themalaysianreserve.com
Article in nst.com.my KPJ Healthcare Bhd (KPJ), one of the main healthcare service operators in the country, has allocated capital expenditure (capex) of RM500 million for this year. Its chairman Datuk Md Arif Mahmood said, “The capex for this year will not only include the upgrading of the existing hospitals but also be use to buy new equipment and managing the data infrastructure.”
Meanwhile, Md Arif said the company was optimistic about the outlook of health tourism industry this year underpinned by the returning medical tourists.
He said since the borders repening and resurgence of the global and regional economy, the industry had provided new opportunities to the country’s healthcare service sector including KPJ. Do read the article in full here: Article in nst.com.my
Many ways to join into this potential growth
One way would be to buy the share of IHH or KPJ. Some details of the share price as below. Dividend yield is low but if we assume the company is growing, then there’s also a chance that the low number is because the share price has increased as people anticipated the future result and has thus paid more for it currently. Please do your own due diligence yeah. I do not own stocks in IHH nor KPJ and thus did not study in-depth of the stock. However, if stock is not your cup of tea, you can also participate directly into the growing healthcare demand too. Read on after the image.
Directly own a piece of the action is also possible
One example is to buy property units which could be rented out to the doctors, nurses, patients etc. Just find out the location of hospitals, then start asking around if there are any property units nearby which is the favourite of visitors to the hospitals to stay after treatment or during recovery phase etc. Here’s one potential too. As usual, please do your own due diligence and I do not own a unit nor get any commission from any sale of the units in KL Wellness City (KLWC). 9 Important Things to Know about KL Wellness City (KLWC)
If we intend to read more about the demand for healthcare. Here’s an article with a lot of numbers: Dynamic Duo: Property Investment and Healthcare Demand
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