KUALA LUMPUR: Plans to turn Petaling Jaya into a health metropolis, with a world-class campus for healthcare and bioscience, is an important move to enhance Malaysia’s status in the regional healthcare industry, says MIDF Research (MIDF).
The metropolis is expected to provide education, clinical care and research in one economically self-sustaining campus proposed to leverage on Universiti Malaya’s on-campus site.
“We believe in the RM1 billion proposed development plan to make Petaling Jaya a health metropolis, which is expected to generate about RM50 billion investment,” it said in a research note yesterday.
Government-linked companies like Khazanah Nasional Bhd and Sime Darby Bhd, with interest in the health industry, are likely to be involved in the project.
The research house also said a supportive ecosystem to grow clinical research must be created to promote domestic healthcare sector and enhance services and quality.
“It can also be done via creating a diagnostic services nexus to achieve the scale in telemedicine for eventual international outsourcing and launching e-healthcare.
“We believe with proper implementation and execution and supportive medical ecosystem, the health metropolis plan may be rewarding in the long-term horizon,” it said.
Hence, the research house maintained its ‘neutral’ call, with unchanged target price for KPJ Healthcare at RM3.51 per share, given the fact that valuation was not cheap, assuming all the warrants exercised despite estimated topline growth remain unfavourable.
Meanwhile, for Faber Group Bhd (Faber), the largest hospital support services provider, MIDF made a ‘buy’ call at RM3.50 per share due to increasing demand for hospital support services and long-term earnings visibility as it believed Faber’s concessionaire contract would be extended.
“The call is also made in view of the expansion abroad, especially to the United Arab Emirates, which will drive future growth and earning upside on potential concession rate hike and potential takeover target,” it added. — Bernama