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Land acquisition boosts Sunway Healthcare's growth prospects
🇲🇾 Malaysia /Health & Science

Land acquisition boosts Sunway Healthcare's growth prospects

From Utusan Malaysia · () Malay

Translated from Malay, summarized and contextualized by DistantNews.

At a glance

News Sources not specified New plan
  • Sunway Healthcare Holdings Bhd. plans to acquire four freehold land lots in Sunway City Iskandar Puteri, Johor, to build a new tertiary hospital.
  • The acquisition, costing RM45.37 million, aims to expand Sunway Healthcare's network and strengthen its presence in Johor.
  • Hong Leong Investment Bank maintained a 'hold' rating on Sunway Healthcare shares but adjusted its target price, anticipating a slight increase in the company's net gearing ratio.

Sunway Healthcare Holdings Bhd. is set to enhance its long-term growth prospects with a proposed acquisition of four freehold land parcels in Sunway City Iskandar Puteri, Johor. The company intends to develop a new 410-bed tertiary hospital on the 4.01-hectare site.

The acquisition is in line with Sunway Healthcare's strategy to expand its tertiary hospital network and strengthen its presence in Johor.

— Hong Leong Investment BankHLIB's research note explaining the strategic rationale behind Sunway Healthcare's land acquisition.

The acquisition, valued at RM45.37 million, will be undertaken by Sunway Medical Centre Sdn. Bhd., a subsidiary of Sunway Healthcare. The land is being purchased from Sunway Marketplace Sdn. Bhd., Sunway Parkview Sdn. Bhd., and Sunway Iskandar Sdn. Bhd. This strategic move aligns with Sunway Healthcare's objective to broaden its tertiary hospital network and solidify its footprint in Johor.

Hong Leong Investment Bank (HLIB) views the proposed hospital as a key driver for healthcare services within Sunway City Iskandar Puteri, an integrated city within the Johor-Singapore Special Economic Zone (JS-SEZ). HLIB noted that the larger land area also provides future expansion opportunities for Sunway Medical, including the potential development of eldercare facilities.

The proposed hospital is expected to be a key driver for healthcare services in Sunway City Iskandar Puteri, an integrated city within the Johor-Singapore Special Economic Zone (JS-SEZ).

— Hong Leong Investment BankHLIB's research note highlighting the significance of the new hospital for regional healthcare.

Despite the positive outlook, HLIB has downgraded Sunway Healthcare's stock rating to 'hold' from 'buy,' citing recent share price increases that limit further upside potential. The bank maintained its target price at RM2.05 per share. HLIB forecasts a slight increase in Sunway Healthcare's net gearing ratio to 28.8% in FY2027 from the current 27.6% due to the acquisition. The financial impact on earnings is not expected during the construction phase, with contributions from the new hospital anticipated after HLIB's projection period of FY2026-2028.

The larger land area also provides room for Sunway Medical to expand the hospital in the future and develop eldercare facilities.

— Hong Leong Investment BankHLIB's research note on the future development potential of the acquired land.
DistantNews Editorial

Originally published by Utusan Malaysia in Malay. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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