This article first appeared in The Edge Malaysia Weekly on March 9, 2026 - March 15, 2026

KPJ Healthcare Bhd’s (KL:KPJ) stock hit a record high of RM3.28 in intraday trading on Wednesday (March 4), which saw the company’s market capitalisation test the RM14.5 billion mark for the first time since it was listed on Bursa Malaysia in November 1994.

From mid-January this year, KPJ’s share price has gained about 23%, thanks to renewed interest in the country’s largest private healthcare group by capacity.

One catalyst for the rising share price was the company’s financial results for the year ended Dec 31, 2025 (FY2025), released at end-February. KPJ made a net profit of RM365.93 million on revenue of RM4.26 billion. In FY2024, it had registered a net profit of RM353.82 million on revenue of RM3.9 billion.

Another catalyst was obviously the initial public offering of Sunway Healthcare Holdings Bhd on Bursa slated for March 18 at RM1.45. The IPO is expected to raise RM2.86 billion, making it among the largest listings on the local bourse in the past nine years. Based on its IPO price, Sunway Healthcare is valued at RM16.7 billion.

Of the RM833.8 million raised from the sale of new shares, the company will use RM554 million for the expansion of its existing hospitals, RM250 million to reduce its debt and RM30 million to cover listing expenses.

“Sunway Healthcare’s valuation looks rich,” says a market watcher. If it can command such a lofty valuation, other players in the industry deserve a second look, hence the interest in KPJ lately.”

In a March 4 research report, TA Securities says Sunway Healthcare’s IPO is priced at a trailing price-earnings ratio (PER) of 64.8 times and an EV/Ebitda of 36.1 times, based on its FY2024 performance, where it chalked up a net profit of RM257.5 million on revenue of RM1.85 billion.

KPJ, at its close of RM3.10 last Thursday, was trading at a trailing PER of 37.04 times.

A seasoned investor says: “Either Sunway Healthcare is priced too aggressively or its peers are undervalued.”

In its report on the company, TA Securities says, “Our assigned EV/Ebitda multiple represents a 24% premium to the peers in the private healthcare services space. This premium reflects: (i) Sunway’s strong brand reputation, (ii) robust growth prospects and (iii) its proven track record of rapid ramp-up periods for new hospitals.”

The research house has pegged a target price of RM1.62 to the stock.

Sunway Healthcare operates five hospitals, with a total of 1,805 licensed beds and a total bed capacity of 1,982. It also operates two ambulatory care centres and four supportive and complementary care centres.

In the competitive healthcare sector, KPJ is no slouch. It operates 3,934 beds across nearly 30 hospitals throughout Malaysia — from Kuching, Miri and Sibu in Sarawak to Kota Kinabalu in Sabah, as well as multiple facilities in Johor, which is unsurprising, given that Johor Corp Bhd holds a 45% stake in the group. Its network also includes specialist centres in Alor Setar, Kedah; Kota Bharu, Kelantan; and Kuantan, Pahang, among others — with an occupancy rate of close to 70%.

KPJ also aims to expand its capacity by 56%, adding 2,200 new beds by 2030. In addition, many of its hospitals are already mature assets, meaning there is no need to wait three to five years for profits to start flowing in.

While KPJ offers a more affordable range of healthcare services, Sunway Healthcare’s suite of service could be considered somewhat more premium — suggesting the two may not compete directly.

Nevertheless, healthcare remains a competitive business. At its foundation are government-run general hospitals and clinics that serve the masses, followed by non-profit institutions such as Tung Shin Hospital and Assunta Hospital, and private operators such as KPJ and Asia OneHealthcare, which target the middle-income segment.

As at end-December 2025, KPJ had deposits, bank and cash balances of RM1 billion. On the other side of the balance sheet, the healthcare services provider carried long-term debt commitments of RM1.36 billion and short-term borrowings of RM268.59 million. Its reserves stood at RM1.9 billion. According to AskEdge, KPJ’s net gearing stood at 1.1 times as at end-2025.

In a Feb 27 report, Maybank Investment Bank forecasts KPJ’s outpatient volume in FY2026 at roughly 3.17 million, with an average revenue per outpatient of RM330. Meanwhile, inpatient volume is estimated at 440,826, with an average revenue per inpatient of RM7,910.

Maybank IB has a “buy” call on KPJ and has raised its sum-of-the-parts target price for the hospital operator to RM3.26 (based on 13 times forecast FY2026 EV/Ebitda), from RM3.

The research house expects KPJ to register RM448 million in net profit on revenue of RM4.52 billion for FY2026, with net profit projected to grow to RM535 million on revenue of RM5.07 billion in FY2027.

According to Bloomberg data, 11 analysts have a “buy” call on KPJ, six recommend a “hold” and none has a “sell”. The consensus target price of RM3.20 offers an upside of 3.22% from KPJ’s closing price of RM3.10 last Thursday. 

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