Maintain neutral call with lower target price (TP) of RM6.08
- Parkway Pantai’s (PPL) revenue was higher by 19.6% YoY to RM1.54bn for 3QFY16, while EBITDA increased 14.2% YoY to RM354.4m, on the back of continuous ramp up of its Mount Elizabeth Novena Hospital in Singapore as well as contribution from its newly opened hospitals and acquisitions made in 2015. On operations, number of inpatient admissions in Singapore and Malaysia increased by 13.6% and 9.0% respectively. Its revenue per inpatient admissions in Singapore declined by 3.0%, while Malaysia increased by 10.2%. Its earnings was partially eroded by higher operating expenses and staff cost, start-up losses of RM2.3m from its new hospitals in Malaysia as well as pre-opening expenses of RM19.7m incurred for its coming Gleneagles Hong Kong.
- Acibadem’s revenue increased to RM808.7m (+17.8% YoY) in 3QFY16, while EBITDA declined by 10.3% YoY, on the back of higher staff costs as well as operating costs and rental expenses due to further depreciation of Turkish Lira (TL) against USD. EBITDA QoQ declined by 47.5% due to lower revenue and patient volumes during the summer months and long period of holidays to celebrate Eid festivities. Overall, Acibadem’s inpatient admissions jump by 47.9% YoY, mainly contributed by Acibadem City Group. Nevertheless, its revenue per inpatient declined by 9.7% YoY.
- Project progress. The latest project to be completed will be Gleneagles Hong Kong and Acibadem Altunizade in Istanbul, which is expected to complete in the 1st half of 2017. While Acibadem Atasehir in Istanbul, Pantai Hospital Kuala Lumpur and Gleneagles Medini, are all targeted to complete by end-2017 (Table 2)