PETALING JAYA: Kenanga Research has initiated coverage on Sunway Healthcare Holdings Bhd (SHH) with a “market perform” call, citing strong growth prospects but noting its valuations appear stretched relative to peers.
The research house has set a target price of RM1.75, representing a 15% discount to comparable Indian healthcare operators.
It noted that while Asean peers trade at lower multiples, SHH’s growth outlook supports its premium positioning.
“SHH is poised for a projected net profit growth of 12% in the financial year ending December 2026 (FY26) and a significant jump to 43% in FY27.
“This growth trajectory comfortably outpaces its Indian counterparts,” it said in a report.
Kenanga Research described the group as “a defensive play to rising private healthcare”, underpinned by an ageing population, increasing medical tourism and continued supply constraints in Malaysia’s healthcare sector.
The research house added that SHH’s scale and network should allow it to extract cost efficiencies and mitigate margin pressures during its expansion phase.
A key differentiator is its “hub-and-spoke” model, anchored by the flagship Sunway Medical Centre in Sunway City Kuala Lumpur and supported by a network of satellite hospitals and specialist centres.
This structure enables the group to focus on high-complexity treatments while improving operational efficiency.
“This ability to shorten the gestation period means capital is recycled faster, allowing the group to expand without the multi-year earnings drag typical of the industry,” Kenanga Research pointed out.
