PETALING JAYA: The launch of Sunway Medical Centre Damansara (SMCD) marks yet another addition to an increasingly crowded private healthcare landscape in Damansara.
With private hospitals like Thomson Hospital (Thomson), owned by TMC Life Sciences Bhd
(TMCL), as well as KPJ Damansara and the KPJ Damansara 2 both owned by KPJ Healthcare Bhd, competition is already intensifying.
The arrival of another major hospital like SMCD raised questions about the sustainability of such rapid expansion.
Maybank Investment Bank (Maybank IB) Research said the impact would be more on TMCL and less so for KPJ.
“We do not expect IHH Healthcare Bhd to be impacted as it is not present in Damansara.
“SMCD’s large promotional banner is displayed right across the street in front of Thomson in a bold marketing move signalling its intent to compete for Thomson’s premium clientele,” it said.
The research house said Thomson had responded by placing its own banner near SMCD, turning this into a high-profile battle for visibility.
Thomson, a Damansara veteran having been in operation since 2008, has built its reputation on premium personalised care, catering to high income patients and medical tourists, it said.
Maybank IB Reseach said from its recent visit to Thomson, it found the company’ business “bustling”.
“We gather that Thomson could be most negatively impacted by the arrival of SMCD.”
Thomson is less than 10-minute drive from SMCD, it noted.
“While TMCL plans to expand into Johor, Thomson, with 554 licensed beds, is currently the only hospital in its portfolio.
“While TMCL does have other businesses such as TMC Fertility, Thomson TCM and TMC Care Pharmacy, Thomson accounted for 89% of its revenue in the financial year ended June 30, 2024,” it pointed out.
Relative to TMCL, SMCD’s threat to KPJ hospitals within the Damansara area would most likely be muted, Maybank IB said.
Both KPJ Damansara hospitals are backed by Malaysia’s largest private healthcare operator (by bed capacity), which allowed them to leverage on KPJ’s strong network of hospitals, insurance as well as corporate partnerships.
Furthermore, the research house said that healthcare demand in Damansara and the larger Klang Valley area remained robust.
With population growth and an increasingly ageing demographic, a middle to upper income segment, rising affluence and higher case mix complexity, the research house said Malaysia’s private healthcare’s structural strengths remained intact.
“Our recent sector update elaborated on these points at large.
“We reiterate our view that medical tourism remains a catalyst to further bolster growth and revenue intensity as Malaysia remains a key destination in Asean for affordable yet high quality healthcare offerings.”
However, it noted that while there is room for multiple players to coexist and thrive, it said hospitals have to continuously differentiate themselves to sustain long-term profitability.
“While demand is strong, patient distribution is not uniformed, and competition for premium patients, specialists, and advanced medical services is intensifying.
“Ultimately, while we believe that the market can sustain multiple hospitals, not all will benefit equally.
“This makes strategic positioning and service excellence the key to long-term survival.”
For its third quarter ended Sept 30, 2024, Sunway’s profit rose to RM376.08mil compared with the previous corresponding quarter, while revenue grew to RM2bil from RM1.5bil a year earlier.
