MARC Ratings has affirmed its AAIS(cg)/Stable rating on Point Zone (M) Sdn Bhd’s Sukuk Wakalah Programme. Point Zone is a funding vehicle established by KPJ Healthcare Berhad (KPJ) solely to issue the sukuk, and the rating is based on KPJ’s credit strength under its corporate guarantee.
The rating affirmation reflects KPJ’s strong business profile, anchored by its position as the largest private healthcare provider and its long-established brand. Its solid operating track record — with 30 hospitals and an estimated 20% market share based on licensed bed count — supports steady revenue growth and strong cash flow. The rating also incorporates its strengthened balance sheet and sound liquidity. However, these credit strengths are moderated by broad industry risks, including regulatory uncertainty, potential contingent liabilities, and the ongoing national nursing shortage.
KPJ’s 2024 performance was underpinned by strong patient-volume growth. Inpatient admissions rose 7.3% to 375,905, lifting bed occupancy to 68%, while outpatient visits increased 1.5% to 2.8 million and surgeries grew 4.8% to 108,799. These trends drove a 14.7% revenue increase to RM3.92 billion, broadly in line with expectations. In 1H2025, outpatient visits and surgeries rose 3% and 5% y-o-y to 1.39 million and 55,220, and inpatient admissions were largely stable at 179,620. Combined with higher revenue per patient, this resulted in 9% y-o-y revenue growth to RM1.99 billion. The second half of the year typically contributes 52%-53% of annual revenue due to stronger patient activity. Long-term growth remains supported by an ageing population, greater health awareness, rising prevalence of non-communicable diseases, higher incomes, and expanding medical tourism.
As of end-June 2025, KPJ’s total borrowings were RM1.71 billion, broadly in line with projections. The debt-to-equity ratio continued to decline, reaching 0.61x from 0.76x at end-2023, supported by revenue growth and lower borrowings. Liquidity remained strong, with RM600.3 million in cash and cash equivalents, and RM216.2 million in undrawn facilities. CFO interest and debt coverage improved to 9.6x and 0.5x in 2024, surpassing earlier forecasts. Under a sensitised scenario assuming 5% annual revenue growth and a 20% EBITDA margin for 2025–2029, CFO interest and debt coverage remain around 2.2x–7.9x and 0.1x–0.2x. Capex and dividends follow the base case, though KPJ could scale back spending, if required, to preserve flexibility.