MARC Ratings has affirmed its rating of AAIS(cg) on Sunway Healthcare Treasury Sdn Bhd’s Islamic Medium-Term Notes (Sukuk Wakalah) Programme of up to RM5.0 billion. The rating outlook is stable. The rating reflects the credit strength of parent Sunway Healthcare Holdings Berhad (SHH), based on the unconditional and irrevocable guarantee from SHH on the programme.
The rating reflects SHH’s strengthening business profile, driven by a rising market share in the Malaysian healthcare sector and strong debt-servicing capacity from robust internal cash flow. Liquidity remains healthy, supported by financial flexibility from shareholders, Sunway Berhad and Greenwood Capital Pte Limited — an indirect wholly-owned subsidiary of Singapore’s sovereign wealth fund, GIC Private Limited. SHH’s planned initial public offering (IPO) by 1Q2026, intended to fund expansion and reduce debt, is expected to further enhance financial flexibility and strengthen the capital structure. These strengths are moderated by execution risks from rapid expansion, regulatory exposure, and an industry-wide shortage of nurses.
As of July 2025, SHH operated five hospitals with 1,662 licensed beds (end-2024: 1,396 beds), ranking fourth among private healthcare providers by bed count. Bed capacity is expected to grow to about 3,000 by 2030 through phased expansions and new hospitals. Supported by long-term demographic and healthcare trends — including an ageing population, rising demand for chronic care, growing affluence, and steady medical tourism inflows — patient throughput rose 21% y-o-y to 832,440 in 7M2025, on track to surpass 2024’s 1.3 million visits.
Higher patient volumes have translated into stronger financial performance, with revenue on track to exceed 2024’s RM1.9 billion, driven by strong demand and capacity growth. Strong top-line performance continues to drive EBITDA and cash flow, though margins are slightly pressured by start-up costs at new hospitals. With expanding bed capacity and favourable industry dynamics, SHH expects to generate annual operating cash flow (CFO) of RM550 million to RM1.3 billion over the next five years.
As of end-July 2025, borrowings increased to RM1.6 billion, reflecting ongoing capacity expansion of its medical centres. Debt is projected to range between RM1.7 billion and RM2.3 billion over FY2025–FY2030, above earlier estimates owing to higher construction costs and the accelerated pace of hospital development. Despite the higher leverage, coverage is expected to remain strong, with CFO/interest at 6.3x–12.4x and CFO/debt improving to 0.5x by 2030 from 0.2x in 2025. The debt-to-equity ratio, at 0.7x as of end-July 2025, is expected to decline to 0.4x–0.5x post-IPO, reflecting the larger equity base.
Overall, strong profitability, robust cash flow, and an improved post-listing capital structure provide flexibility to manage leverage, support gradual deleveraging, and sustain a resilient financial profile.