KUALA LUMPUR (May 20): Sime Darby Bhd's healthcare unit is making a foray in China under an equally-owned joint venture (JV) with a hospital operator there.

In a statement today, Sime Darby's (fundamental: 1; valuation: 1.1) healthcare unit Ramsay Sime Darby Health Care said it had signed the JV contract with China-based Chengdu Jinxin Healthcare Investment Management Group Ltd.

"The total cash consideration for Ramsay Sime Darby’s 50% equity share of the joint venture will be approximately USD135 million (RM431 million) and will be funded through Ramsay Sime Darby’s existing debt facility.

"Ramsay Sime Darby Health Care will have an effective 50% stake in the final 50-50 joint venture and is expected to be the first international hospital operator to invest across a broad spectrum of specialty facilities in the Chinese hospital market," Ramsay Sime Darby said.

According to Ramsay Sime Darby, the JV will initially involve four of Jinxin's hospitals in Chengdu and later, a 500-bed women's private hospital.

Sime Darby group chief executive officer Tan Sri Mohd Bakke Salleh said the JV with Jinxin was a good opportunity, as Ramsay Sime Darby had planned to build a portfolio of hospitals across Asia.

Ramsay Sime Darby, which was formed on July 1, 2013, operates three hospitals each in Malaysia and Indonesia. The company also runs a nursing and health sciences college.

Today, Mohd Bakke said: "Both partners — Ramsay and Sime Darby — have been keen to expand our hospital portfolio in Asia and this new deal with Jinxin, a reputable hospital operator, provides Ramsay Sime Darby with a foothold in a very attractive market and allows it to accelerate our growth plans in the region," he said.

At 12.30pm, Sime Darby shares rose one sen or 1% to settle at RM8.96 for a market value of RM55.65 million.

Some five million shares changed hands.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)