KUALA LUMPUR (Aug 19): KPJ Healthcare Bhd (KL:KPJ) shares reached a two-week high on Wednesday after its first-half results beat analysts’ estimates.
The counter jumped 12 sen or almost 4% to RM3.14, valuing the group at some RM4.53 billion, with more than 13 million shares changing hands.
KPJ saw its profits surge in the six months ended June 30, 2026 (1HFY2026), growing 28% year-on-year (y-o-y) to RM128 million, beating analysts’ estimates.
On a quarterly basis, KPJ reported second-quarter core net earnings of RM113 million, up 42% y-o-y, ahead of its RM93 million forecast in its earlier results preview.
“This brings 1HFY2026 core earnings to RM182 million, which we deem ahead of our and consensus estimates, accounting for 45% and 46% of full-year forecasts.
“The beat was driven by higher-than-expected revenue and a lower-than-expected tax rate,” said RHB Research in a note on Wednesday. It kept its ‘buy’ call on the stock with a target price of RM3.77.
Hong Leong Investment Bank (HLIB) in a separate note said the jump in quarterly revenue was attributed to a return in business volume, which surpassed disruptions in 1HFY2026 caused by festivals such as Chinese New Year and Hari Raya.
“Going into 2HFY2026, we expect seasonally stronger revenue and earnings, particularly in 4QFY2026, which typically delivers a higher Ebitda margin, potentially due to a more favourable mix of elective surgeries,” it added.
Overall, the house, which has a ‘buy’ call on the stock with a target price of RM3.79, expects earnings to grow 6.1% y-o-y by the end of 2026.
The research house also signalled that an ageing population alongside a growing preference for private hospitals and persistent hospital bed supply-demand imbalance would provide further tailwinds for the group despite rising cost pressures from insurance agencies.
“While the insurance and takaful operators-related discount is expected to have a full-year impact in 2026 (versus eight months in 2025), this should be partly mitigated by ongoing cost optimisation initiatives, including the internal DRG (diagnosis-related group) system, as well as rising case complexity supported by the roll-out of multiple centres of excellence,” explained HLIB.
In a separate note, Public Investment Bank also noted that the Malaysian government’s MediAsas plan as part of planned healthcare financing reforms could also benefit KPJ down the line, as the insurance and takaful initiative would allow for improved affordability and accessibility to private healthcare services.
“We remain cautiously optimistic on KPJ’s growth prospects, supported by sustained demand for quality healthcare,” the house said, maintaining its ‘neutral’ call on the stock with a target price of RM3.17.
On a similar note, RHB Research cautioned that higher-than-expected operating costs alongside below expectations patient volumes and lowered revenue intensity growth would act as headwinds to the group down the line.
Common sentiment was also mostly bullish among the 18 research houses tracked on Bloomberg, with 12 ‘buy’ calls, six ‘hold’ and no ‘sell’. The average target price is RM3.56 a share.
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