KUALA LUMPUR (March 3): Shares of KPJ Healthcare Bhd (KL:KPJ) charted a new all-time high on Monday, as investors cheered the special dividend declared after record profits at the hospital operator.

KPJ Healthcare rose as much as 18 sen or nearly 8% to RM2.55 within the first 10 minutes of trading. The stock then moved up by another notch in the afternoon session to close 27 sen or 11.39% higher at RM2.64, giving the company a market capitalisation of over RM11.95 billion. Trading volume totalled 26.86 million shares.

The results in 2024 were better than expected, and the growth will likely continue this year, on the back of capacity expansion and higher patient volumes that will provide KPJ Healthcare with incremental revenue growth, analysts said in raising their earnings estimates.

“We believe KPJ’s growth prospects remain well supported by its strategic efforts to optimise underperforming assets and enhance core operations,” Public Investment Bank said and kept the stock on an ‘outperform’ call.

KPJ Healthcare has rebounded from a sharp selldown in December 2024 after the government announced it is looking at implementing the diagnosis-related group (DRG) system to contain skyrocketing private healthcare costs this year.

There are now 10 ‘buy’, seven ‘hold’, and no ‘sell’ calls on KPJ Healthcare. The consensus’ 12-month target price rose slightly to RM2.69 on Monday, according to Bloomberg.

“Although the regulatory overhang arising from the DRG mechanism could affect investor sentiment in the near term, we think that their appetite for quality healthcare assets remains intact — in view of a permanent, structural shift driven by an ageing population,” said RHB Investment Bank in a note.

Nevertheless, any implementation would still require an extensive study and engagement with various stakeholders, given the complexity of each medical procedure and its underlying costs, the house added.

Last Friday, KPJ Healthcare announced that its net profit surged 64% year-on-year to RM120.52 million for the fourth quarter ended Dec 31, 2024 (4QFY2024), as revenue growth from higher patient visits and bed capacity outpaced increases in costs and expenses.

KPJ Healthcare declared a special dividend of 0.10 sen per share, alongside an interim dividend of 1.05 sen per share. Total dividends for FY2024 stand at 4.15 sen per share, up from 3.35 sen in FY2023.

For the full year, net profit grew 34% to RM353.82 million, with more patients visiting the group's hospitals, on the back of an increase in bed capacity. Revenue climbed nearly 15% to RM3.92 billion from FY2023.

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KPJ Healthcare logs another record quarterly profit, declares special dividend