Advertisements

We downgrade KPJ to HOLD with a TP of RM1.15, based on SOP valuation (DCF with WACC: 7.9%, g: 2.0% on its hospital business). KPJ’s share price has risen 13% ytd despite muted 1H21 performance, indicating that the market may have priced in the potential recovery ahead as the industry transitions toward normalcy. The stock is currently trading at 12.5x EV/FY22E EBITDA, which is in line with its 5-year mean of 12.6x.

Advertisements