KUALA LUMPUR (Aug 12): Hong Leong Investment Bank (HLIB) Research has maintained its “buy” rating on KPJ Healthcare Bhd at 87.5 sen with an unchanged target price (TP) of RM1.13 and said its recent meeting with KPJ has further reaffirmed its positive view on the group, owing to the initiatives KPJ has in place to boost its performance going forward.

In a note on Friday (Aug 12), the research house said it believes KPJ’s recovery post pandemic will be supported by the return of both local and foreign patients and we are also positive on the ongoing divestment of its non -core a ssets, as it would allow KPJ to redirect its resources to focus on core operations.

HLIB said that to boost its foreign patient revenue, 12 out of the 28 KPJ hospitals nationwide have been identified as a healthcare tourism (HT) hospital, whereby a designated team will look into matters concerning foreign patients to ensure maximum conversion.

It said the said hospitals are mainly located in cosmopolitan areas with better land and air connectivity.

“Prior to the pandemic, medical tourism only accounts for about 5% of the group’s total revenue, and at its peak in FY19, KPJ has generated RM150 million worth of revenue from foreign patients.

“With international borders now reopened, KPJ has set a modest revenue target of RM120 million for FY22.

The research house said it continues to like KPJ as the group is moving in the right direction wit h the initiatives it has in place and is bound to benefit from the recovery in both local and foreign patient volumes.

“Reiterate 'buy' on KPJ with an unchanged SOP-derived TP of RM1.13,” it said.