KUALA LUMPUR (May 21): Shares of Sunway Healthcare Holdings Bhd (KL:SUNMED) slipped in early trade on Thursday after the hospital operator’s first-quarter earnings came in short, delivering only 15% of the full-year estimates.
Still, most analysts considered the results to be within expectations, pointing to seasonal factors as a key reason.
The stock fell as much as 2% in early trading. The stock later pared losses to trade at RM1.82 at 10.00am — down 1.1% with more than eight million shares changing hands.
Maybank Investment Bank said the softer quarter was mainly due to festive and holiday-related disruptions, as Chinese New Year, Hari Raya and school holidays typically led patients to postpone non-urgent treatments.
Still, analysts expect earnings to improve in the coming quarters, supported by stronger operating leverage at Sunway Medical Centre (SMC) Penang and improving contributions from SMC Damansara and SMC Ipoh.
CIMB Investment Bank noted that patient growth remained healthy across Sunway Healthcare’s hospital network. Inpatient admissions rose 15% year-on-year, outpatient visits increased 13%, while daycare patient numbers grew 19%.
The stronger inpatient growth was supported by a 22% increase in licensed beds, or an additional 323 beds year-on-year, mainly from SMC Ipoh. Total bed capacity stood at 1,805 as at the first quarter ended March 31, 2026.
Average revenue per inpatient rose 10% year-on-year to RM12,548, while revenue per outpatient and daycare patient increased 5% and 3% respectively.
Analysts also said that Sunway Healthcare remains on track with its expansion plans. The group aims to add 461 beds by 2028, lifting total operating beds to 2,443 from 1,982 in 2025, representing a three-year compound annual growth rate (CAGR) of 7.2%.
Future growth is expected to come mainly from brownfield expansion within its existing hospital network, while longer-term plans include new developments in Seremban Sentral, Iskandar and Putrajaya that could add another 985 beds beyond 2028.
Maybank maintained its 'buy' call and RM2.01 target price, based on a financial year ending Dec 31, 2027 (FY2027) enterprise value-to-earnings before interest, taxes, depreciation and amortisation (EV/Ebitda) multiple of 28 times.
The research house said it made no changes to its FY2026-FY2028 forecasts and continues to expect Ebitda CAGR of 23% over the FY2025-FY2028 period, with rising costs for drugs and consumables already factored in.
It added that while no official price hikes have been announced, this remains a key watch point for the second half of 2026, estimating that a 5% increase in costs could reduce core net profit by 9%.
Maybank also viewed SMC Sunway City’s participation in the Ministry of Health’s Malaysia Health Information Exchange and diagnosis-related group (MHIT/DRG) initiative positively, given the hospital’s large bed capacity that could support higher patient volumes.
Meanwhile, CIMB reiterated its 'hold' call and RM1.88 target price, saying Sunway Healthcare’s premium valuation is justified by its stronger earnings growth outlook, better margins and more aggressive expansion strategy compared with peers.
CIMB forecasts Sunway Healthcare’s net profit CAGR at 23.6% for 2025-2028, compared with an average of 9% for local peers. However, the brokerage believes much of the upside has already been priced in after the stock gained 27% since its initial public offering (IPO) debut in March 2026.