KUALA LUMPUR (March 4): Analysts say one of Malaysia’s largest hospital groups, Sunway Healthcare Holdings Bhd, deserves a premium valuation to its peers ahead of its Main Market initial public offering (IPO) due to its rapid expansion and strong growth outlook.
Public Investment Bank values the stock at RM1.35-RM1.55 or 20-23 multiples of its financial year 2027 forecasts for enterprise value and earnings before interest, tax, amortisation and depreciation (EV/Ebitda), above peers at 14-19 times. However, with the IPO price set at RM1.45, the stock sits near the midpoint of this valuation, which may limit the immediate upside for investors.
The firm said the premium to its peers is justified due to Sunway Healthcare’s market leadership, strong expansion plans, wide range of services and status as one of Southeast Asia’s fastest-growing private hospital groups.
TA Securities values the stock at RM1.62, 24% above peers, reflecting confidence in Sunway Healthcare’s brand, growth and fast hospital expansion, according to its research note.
The group plans to expand bed capacity by 74% to 3,444 beds by 2032, with the potential to exceed 3,900 beds through additional projects. Expansion and growing exposure to medical tourism are key investment drivers.
The healthcare arm of Sunway Bhd (KL:SUNWAY) is launching its IPO price at RM1.45 apiece, with the aim of raising up to RM2.86 billion, making it one of the biggest listings in Malaysia in the past nine years. Its listing is scheduled for March 18, 2026.
Beyond hospital services, which account for about 98% of revenue, the group provides ambulatory care, traditional and complementary medicine, home healthcare and senior living services.
TA Securities said this will support higher utilisation and stronger revenue growth as new hospitals ramp up operations. It is expected to achieve Ebitda-positive results within 12 to 18 months of opening, which the research house said is faster than the typical three- to five-year industry average.
In a separate note, Public Investment Bank said Sunway Healthcare is poised to leverage the international medical tourism market.
“The proximity to Sunway’s hospitality assets and transport connectivity is expected to support medical tourist inflows, contributing to patient mix diversification and incremental revenue growth," said Public Investment Bank.
It projects the group’s revenue to grow at a three-year CAGR of about 14.7% between FY2025 and FY2027, driven mainly by an 11.5% increase in licensed bed capacity and improved occupancy rates across its hospitals.
Both analysts noted downside risks to these valuations, which include potential delays in rolling out new capacity, workforce shortages and the looming implementation of a diagnosis-related group (DRG) payment system that could temper pricing growth.