PETALING JAYA: Hong Leong Investment Bank Research has put a fair value of 22 sen a share on healthcare company PMCK Bhd
, which is scheduled to be listed on the ACE Market tomorrow.
The valuation is equal to the initial public offering (IPO) price of PMCK shares and based on a 10 times enterprise value (EV) to its earnings before interest, taxes, depreciation, and amortisation (Ebitda) multiple on next year’s earnings, representing a 25% discount to the sector average of 13.5 times.
“We think that the discount is justifiable because PMCK is more geographically concentrated in Kedah, primarily operating as a community hospital offering secondary care, whereas IHH Healthcare Bhd and KPJ Healthcare Bhd provide tertiary care.
“Also PMCK’s projected three-year compound annual growth rate (CAGR) 3.8% on earnings trails that of IHH Healthcare at 9.7% and KPJ Healthcare’s 9.2%,” the research house said in a report on PCMK.
The earnings CAGR of 3.8% between 2024 and 2027 will be primarily driven by the conversion of three and four-bed rooms to single and two-bed rooms, as well as increasing revenue intensity, the research house said.
PMCK currently operates Putra Medical Centre (PMC), a 121-bed private medical centre, one polyclinic, two dental clinics and one medical laboratory in Kedah.
The company plans to expand its operations with the development of PMC Kulim which will be a 90-bed, 12-storey private medical centre with integrated facilities at a total cost of RM193mil
PMC Kulim is expected to commence operations in the first quarter of 2028.
HLIB Research stated the project will be primarily funded with bank borrowings, partially to be repaid with the RM60mil raised from PMCK’s listing exercise.
PMCK will invest RM5.3mil of its IPO proceeds to upgrade its medical equipment and solar capacity.
PMCK targets a dividend payout ratio up to 20% of its earnings, after considering the group’s requirements for working, maintenance, and committed capital .
“Based on our earnings projections, coupled with a 20% payout ratio, this will translate into cash dividends of RM5mil, RM2mil and RM3.1mil for this year, next year and 2027, respectively,” the research house added.
At an IPO market capitalisation of RM239.9mil, this implies a 2026 dividend yield of 1.1% or RM2.7mil cash dividend, which is lower than its healthcare peers that are projected to yield 1.8% for the same year.
In the fourth quarter ended April 30, PMCK recorded revenue of RM20.74mil, primarily driven by its core specialities in cardiology, orthopaedics, and surgical/general surgery.
Correspondingly, the group posted net profit of RM2.28mil for the quarter.
As this is PMCK’s first quarterly report, there are no comparative figures for the preceding corresponding quarter.
For its financial year ended April 30, 2025, PMCK reported lower net profit of RM11.3mil, or 1.39 sen per share, compared with RM15mil, or 1.84 sen, previously.
