Higher patient volumes to lift Sunway Healthcare revenue by 24pc in Q3

Sunway Healthcare Holdings Bhd anticipates a 24% increase in Q3 revenue to RM734 million, propelled by higher patient admissions and more intricate medical procedures. RHB Research projects core net profit at RM86 million and Ebitda at RM178 million for the quarter, bolstered by heightened bed occupancy and enhanced contributions from newer hospitals.

Analyst Eddy Do anticipates patient admissions to rise 17%, outpatient visits and daycare cases to grow 15% and 22% respectively, and treatment intensity to climb 7.5% due to more complex inpatient cases. The addition of new hospital beds at Sunway Medical Centre Sunway City and SMC Velocity has been contributing to this trend. The group's bed occupancy rate reached 72.8% in Q2 and has furthered up in July and August.

Ebitda margin is expected to improve to 24.2% in Q3 from 23.8% in the previous quarter, driven by better operating efficiency at the flagship hospital and improved contributions from newer hospitals. Core net profit is expected to increase 8% quarter-on-quarter, albeit constrained by a higher effective tax rate of 23% compared to 16.2% in the previous quarter.

RHB Research has slightly raised its earnings forecasts for FY2026 to FY2028 by less than 1%, lifted its FY2026 revenue forecast by 6%, but reduced its Ebitda margin assumption to 24% from 25.1%. Despite the group's hospital expansion plans supporting an expected 29% compound annual growth rate in core earnings per share between 2025 and 2028, key downside risks include delays in expansion plans, margin pressure, weaker medical tourism flows, and unfavorable regulatory developments.