KUALA LUMPUR: Sunway Healthcare Holdings Bhd’s third-quarter revenue is expected to jump 24 per cent year-on-year to RM734 million, driven by higher patient admissions and more complex medical treatments.
RHB Research expects the healthcare group to post core net profit of RM86 million and earnings before interest, tax, depreciation and amortisation (Ebitda) of RM178 million for the quarter, supported by higher bed occupancy and improving contributions from its newer hospitals.
RHB Research analyst Eddy Do said patient admissions were expected to increase 17 per cent, while outpatient visits and daycare cases were projected to grow 15 per cent and 22 per cent, respectively.
Higher treatment intensity, reflecting a shift towards more complex inpatient cases, is expected to contribute a further 7.5 per cent to revenue growth.
Do said the group’s new hospital beds were gradually being filled following the completion of Tower F at Sunway Medical Centre (SMC) Sunway City and additional capacity at SMC Velocity.
“New beds are filling up, with the completion of Tower F at SMC Sunway City, where 108 of its 216 paediatric beds were licensed by Q3, freeing up adult beds at the flagship, and as SMC Velocity added 31 licensed beds in Q2,” he said.
Sunway Healthcare’s bed occupancy rate stood at 72.8 per cent in the second quarter and increased further in July and August.
Do expects the group’s Ebitda margin to improve to 24.2 per cent in the third quarter from 23.8 per cent in the preceding quarter, supported by better operating efficiency at its flagship hospital and improving contributions from newer hospitals.
The newer hospitals’ Ebitda margin had risen to 12.2 per cent in the second quarter from 6.2 per cent in the first quarter.
However, Do expects a more modest sequential margin improvement compared with the 3.1 percentage-point increase recorded in the second quarter, which benefited from a recovery following a seasonally weaker first quarter.
Core net profit is expected to grow eight per cent quarter-on-quarter, partly constrained by a higher effective tax rate of 23 per cent compared with 16.2 per cent in the second quarter.
“We are conservative on this, with further upside potentially from recognition of investment tax allowances,” he said.
RHB Research marginally raised its earnings forecasts for the financial years 2026 to 2028 by less than one per cent.
It also lifted its 2026 revenue forecast by six per cent but lowered its Ebitda margin assumption to 24 per cent from 25.1 per cent.
The research firm maintained its “Buy” call on Sunway Healthcare with a target price of RM2.36, implying a 12 per cent upside and an estimated dividend yield of about one per cent for 2027.
Do said the group’s hospital expansion plans supported an expected 29 per cent compound annual growth rate in core earnings per share between 2025 and 2028.
“The balance sheet has ample headroom, with net gearing of 0.10 times as at Q2 and about 92 per cent of RM768 million initial public offering proceeds yet to be deployed,” he added.
Key downside risks include delays in expansion plans, margin pressure, weaker medical tourism flows and unfavourable regulatory developments.