Stock Name: KPJ
Company Name: KPJ HEALTHCARE BHD
Naim Holdings's wholly-owned unit, Naim Land Sdn Bhd (NLSB), had signed a JV agreement with KPJ Healthcare unit Kumpulan Perubatan (Johor) Sdn Bhd (KPJSB) for a hospital project in Miri, Sarawak. The JV company (JV Co) will have an initial authorized share capital of RM25m and an initial paid-up capital of RM19.67m. KPJSB will hold 70% of the JV Co and NLSB the balance. KPJSB will be allotted 13.77m shares or RM13.67m via a cash injection, to be financed via internally generated funds. NLSB will subscribe to 5.9m shares of JV Co or RM5.9m via an injection of a four-acre (1.6ha) land. The land on which the hospital will be built is under NLSB. Under the agreement, Naim Engineering Sdn Bhd will be engaged as the contractor to build and complete the hospital. KPJSB will be the master planner and project manager to advise on the design and technical requirements of the building. (Financial Daily)
Comment: This latest corporate development is in line with KPJ's objective to increase 1-2 new hospitals every year. Currently, there are 2 hospitals owned by KPJ in Sarawak. As the new hospital is expected to be completed only in 2-3 years, we maintain our FY12 and FY13 earnings forecast. KPJ's RM13.8m portion of the paid-up capital is a small dent to KPJ's net gearing of 0.2x as at 31 Dec 2011. Maintain a HOLD with TP of RM4.96 based on 22x FD FY12 EPS, in line with peers' average. (Raymond Choo)
Company Name: KPJ HEALTHCARE BHD
| Research House: ECMLIBRA | Price Call: HOLD | Target Price: 4.96 |
Naim Holdings's wholly-owned unit, Naim Land Sdn Bhd (NLSB), had signed a JV agreement with KPJ Healthcare unit Kumpulan Perubatan (Johor) Sdn Bhd (KPJSB) for a hospital project in Miri, Sarawak. The JV company (JV Co) will have an initial authorized share capital of RM25m and an initial paid-up capital of RM19.67m. KPJSB will hold 70% of the JV Co and NLSB the balance. KPJSB will be allotted 13.77m shares or RM13.67m via a cash injection, to be financed via internally generated funds. NLSB will subscribe to 5.9m shares of JV Co or RM5.9m via an injection of a four-acre (1.6ha) land. The land on which the hospital will be built is under NLSB. Under the agreement, Naim Engineering Sdn Bhd will be engaged as the contractor to build and complete the hospital. KPJSB will be the master planner and project manager to advise on the design and technical requirements of the building. (Financial Daily)
Comment: This latest corporate development is in line with KPJ's objective to increase 1-2 new hospitals every year. Currently, there are 2 hospitals owned by KPJ in Sarawak. As the new hospital is expected to be completed only in 2-3 years, we maintain our FY12 and FY13 earnings forecast. KPJ's RM13.8m portion of the paid-up capital is a small dent to KPJ's net gearing of 0.2x as at 31 Dec 2011. Maintain a HOLD with TP of RM4.96 based on 22x FD FY12 EPS, in line with peers' average. (Raymond Choo)
Source: ECM Newz Bits 20 April 2012
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