PETALING JAYA: Sunway Healthcare Holdings Bhd, which will make its debut on Bursa Malaysia’s Main Market today, is expected to post a stronger core net profit this year with a bigger operating margin.
This will be led by contributions from its hospitals in Penang, Damansara and Ipoh, according to Hong Leong Investment Bank (HLIB) Research.
It has forecast a 20.5% year-on-year (y-o-y) growth in core profit for the financial year of 2026 (FY26), based on its note issued yesterday.
Earnings before interest, tax, depreciation and amortisation (Ebitda) margin is expected to increase to 24.6%.
The margin expansion, according to HLIB Research, is set to be driven by favourable operating leverage at Sunway Medical Centre (SMC) Penang, alongside positive Ebitda contributions from SMC Damansara and SMC Ipoh.
SMC Damansara, which commenced operations in December 2024, achieved positive Ebitda in August 2025.
Meanwhile, SMC Ipoh’s Ebitda became positive in January 2026 after commencing operations in April 2025.
Both hospitals turned Ebitda positive roughly within eight to nine months.
“In 2026, we project revenue to grow 19.2% y-o-y, supported by stronger contributions across all operating hospitals,” stated HLIB Research.
The research house has a “buy” call on Sunway Healthcare, with a target price of RM1.63 per share.
The target price is about 12% higher than Sunway Healthcare’s initial public offering price of RM1.45.
Valuation-wise, HLIB Research said the healthcare group is valued at 24 times the enterprise value (EV) to Ebitda for FY27.
“While this represents a 20% premium to the average EV/Ebitda multiple of 20 times for private hospital transactions, we believe the premium is justified by Sunway Healthcare’s transition into the asset-milking stage, unique advantage from the Sunway ecosystem, stronger bed capacity growth prospects, and potential FBM KLCI inclusion.”
In a March 16 note, CIMB Securities Research said that Sunway Healthcare could replace QL Resources Bhd
as a component stock of the FBM KLCI.
“Currently, QL Resources is the smallest FBM KLCI constituent, with a market capitalisation of approximately RM13.4bil and an estimated index weightage of about 0.9%.
“If Sunway Healthcare’s closing market capitalisation on March 18 exceeds that of QL Resources, it is likely to qualify for inclusion in FBM KLCI on a T+2 basis, replacing QL Resources,” said CIMB Research.
A fund manager who spoke with StarBiz said the FBM inclusion of Sunway Healthcare is “likely”.
“If this happens, it will provide further support for Sunway Healthcare’s valuation. The stock has positive upside and it is worth noting that the shares of its listed peers like IHH Healthcare Bhd and KPJ Healthcare Bhd are up by 20% to 30% in the past six months,” added the fund manager.
On Sunway Healthcare’s FY25 results announced on March 16, HLIB Research said the core net profit of RM252.2mil came in line with its full-year estimate.
There are currently no consensus estimates available for comparison
In the fourth quarter of FY25, Sunway Healthcare’s revenue grew 21.3% y-o-y, with contributions from hospitals and other businesses up by 21.3% and 20.7%, respectively.
