MARC Ratings has affirmed its AAIS(cg)/Stable rating on Point Zone (M) Sdn Bhd’s Sukuk Wakalah Programme. The rating reflects the credit strength of the guarantor, KPJ Healthcare Berhad (KPJ), with Point Zone serving solely as the funding vehicle for the sukuk issuance.
The rating affirmation is underpinned by KPJ’s strong business profile, anchored by its leading position in Malaysia’s private healthcare sector and established brand. Its solid operating track record, comprising 30 hospitals with more than 4,000 licensed beds and an estimated 20% market share by bed count, supports resilient revenue growth and robust cash flow generation. The rating also considers KPJ’s moderate leverage and sound liquidity position. These strengths are moderated by the funding and execution requirements of its sizeable expansion programme, elevated medical cost inflation, and regulatory and contingent liability risks.
KPJ’s operating performance in 2025 was underpinned by sustained growth in patient volumes. Total patient visits reached approximately 3.3 million, with inpatient admissions increasing by 0.8% to 379,342, outpatient visits rising by 4.0% to approximately 2.9 million, and surgical procedures growing by 7.3% to about 117,000. In 1H2026, total patient visits increased by approximately 5.0% y-o-y to 1.7 million. Inpatient admissions rose to around 191,000 from 180,000, while outpatient visits and surgical procedures increased to 1.46 million and approximately 59,000, respectively. The bed occupancy rate improved to 66% from 64% in 2025, reflecting stronger utilisation across the hospital network. These trends supported a 9.2% increase in revenue to RM4.26 billion in 2025. In 1H2026, revenue rose by 12.8% y-o-y to RM2.25 billion, while EBITDA increased by 11.4% to RM513.6 million. Longer-term growth remains supported by favourable demographics, the rising prevalence of non-communicable diseases, higher healthcare expenditure and the expansion of medical tourism.
As at end-June 2026, KPJ’s total borrowings remained broadly stable at RM1.63 billion. Its debt-to-equity (DE) ratio improved to 0.50x from 0.54x as at end-2025, while net DE declined to 0.14x from 0.21x, supported by earnings retention and stronger cash balances. Liquidity remained sound, with cash and bank balances of RM1.17 billion and RM317.5 million in unutilised banking facilities. Cash flow from operations (CFO) increased by 6.4% y-o-y to RM893.6 million in 2025, exceeding the projected RM690 million. CFO interest and debt coverage improved to 11.3x and 0.5x, respectively, from 9.6x and 0.4x in 2024.
Under a sensitised scenario assuming 5% annual revenue growth and a 20% EBITDA margin over 2026–2030, CFO interest and debt coverage moderate to 4.1x–7.1x and 0.2x–0.3x, respectively, but remain adequate for the rating. Planned capex remains significant at approximately RM4.9 billion over the period, although KPJ retains flexibility to defer capital expenditure, moderate shareholder distributions or raise additional funding, if required, to preserve its financial profile.