KUALA LUMPUR (Feb 16): KPJ Healthcare Bhd, whose share price hit a new record high on Friday, said its major shareholder Johor Corp (JCorp) has set a 40% revenue contribution target for the group's health tourism segment within the next four years.
Last year, the health tourism business contributed about 8.5% to the group's total hospital business revenue.
KPJ Healthcare president and managing director Chin Keat Chyuan said the group has been challenged by JCorp president and CEO Datuk Syed Mohamed Syed Ibrahim to "make a significant leap to 40%" in terms of revenue contribution from the health tourism business.
Chin said this at a press conference during the launch of a collaboration between KPJ Healthcare and renowned US medical centre Mayo Clinic at the Damansara Specialist Hospital 2 (DSH2) on Friday.
Syed Mohamed, meanwhile, said the initial target is for KPJ Healthcare to achieve a 20% revenue contribution from its health tourism segment in two years, before reaching 40% in the following two years.
Chin is optimistic that KPJ Healthcare can progress towards the “inspiring” 40% target, helped by its collaboration with Mayo Clinic, which is the world's largest integrated non-profit medical group practice.
“This is actually something that we want to do. But I think we will have to have a milestone along the way. From 8.5%, we are going to gradually [achieve the 40% target] through the partnership and the networking with Mayo Clinic,” said Chin.
Under the collaboration, two KPJ Healthcare specialist hospitals — KPJ Damansara Specialist Hospital and DSH2 — will have access to Mayo Clinic’s advanced clinical tools and services, as well as medical care and professional development.
In its financial statement earlier, KPJ Healthcare said the group aims to capitalise on the country’s health tourism sector, which is expected to generate over RM2 billion revenue in 2024.
It added that the group expects to see an increase in the number of patients in 2024, supported by an increase in new beds and services as well as the hiring of new consultants.
KPJ Healthcare’s net profit for the fourth quarter ended Dec 31, 2023 rose nearly 16% to RM73.39 million from RM63.41 million a year earlier, driven by higher patient numbers and tax writeback. Quarterly revenue rose 19% to RM911.5 million from RM765.8 million as patient numbers gained 4%.
Shares in KPJ Healthcare closed down two sen or 1.21% at RM1.63, giving the group a market capitalisation of RM7.38 billion.