Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

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<li>
<a href="https://www.smartkarma.com/entities/bundamedik-tbk-pt" target="_blank" data-smartkarma-citation="entities:33563:1" rel="noopener">Bundamedik Tbk PT (BMHS IJ)</a> reported 15% decline in revenue in 2022. However, non-COVID business recorded revenue growth of 17%. Contribution of core business to total revenue increased to 92%.</li>
<li>All the key operating parameters improved significantly from pre-COVID level. Occupancy rate of the existing hospitals improved to 66% in 2022 from 58% in 2021. New hospitals recorded 71% occupancy.</li>
<li>The company aims to achieve revenue growth of ~17% YoY and EBITDA growth of 23–24% YoY in 2023, supported by the significant development of the company’s core business.</li>
</ul>



Bundamedik Tbk PT (BMHS IJ) reported 15% decline in revenue in 2022. However, non-COVID business recorded revenue growth of 17%. Contribution of core business to total revenue increased to 92%.
All the key operating parameters improved significantly from pre-COVID level. Occupancy rate of the existing hospitals improved to 66% in 2022 from 58% in 2021. New hospitals recorded 71% occupancy.
The company aims to achieve revenue growth of ~17% YoY and EBITDA growth of 23–24% YoY in 2023, supported by the significant development of the company’s core business.


PT Bundamedik Tbk (BMHS IJ): Growing Core Business; Eyeing Mid-Teens Revenue Growth in 2023

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<li>
<a href="https://www.smartkarma.com/entities/kpj-healthcare-berhad" target="_blank" data-smartkarma-citation="entities:877:1" rel="noopener">KPJ Healthcare (KPJ MK)</a> is seeing a resurgence in elective medical procedures and recovery of the health tourism sector. In Q3, total revenue hit highest level in last two years.</li>
<li>Growth was mainly driven by the improving hospital activities evidenced by the increase in patient visits and bed occupancy rate. Bed occupancy has reached pre-pandemic level.  </li>
<li>KPJ Healthcare has opened new flagship quaternary level smart hospital, Damansara Specialist Hospital 2 in September. The new hospital will add value and accelerate further growth for the company.</li>
</ul>



KPJ Healthcare (KPJ MK) is seeing a resurgence in elective medical procedures and recovery of the health tourism sector. In Q3, total revenue hit highest level in last two years.
Growth was mainly driven by the improving hospital activities evidenced by the increase in patient visits and bed occupancy rate. Bed occupancy has reached pre-pandemic level.  
KPJ Healthcare has opened new flagship quaternary level smart hospital, Damansara Specialist Hospital 2 in September. The new hospital will add value and accelerate further growth for the company.


KPJ Healthcare (KPJ MK): 3Q22 Result- Continued Improvement in Operating Parameters

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>KKR cannot improve the terms of its offer but left the door open by stating that a deal can be quickly closed if the Board is willing to reset expectations.</li>
<li>The transaction is stuck in an impasse as <a href="https://www.smartkarma.com/entities/ramsay-health-care-ltd" target="_blank" data-smartkarma-citation="entities:673:1" rel="noopener">Ramsay Health Care (RHC AU)</a> will not recommend KKR’s offer until it is improved, and KKR says it cannot improve terms.</li>
<li>The peers’ shares have been, on average, flat since the undisturbed date. The shares are trading slightly below the undisturbed price and are attractive on fundamentals.</li>
</ul>


KKR cannot improve the terms of its offer but left the door open by stating that a deal can be quickly closed if the Board is willing to reset expectations.
The transaction is stuck in an impasse as Ramsay Health Care (RHC AU) will not recommend KKR’s offer until it is improved, and KKR says it cannot improve terms.
The peers’ shares have been, on average, flat since the undisturbed date. The shares are trading slightly below the undisturbed price and are attractive on fundamentals.


Ramsay’s Bait-And-Switch KKR Offer Heads for the Exit

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<li>
<a href="https://www.smartkarma.com/entities/ramsay-health-care-ltd" target="_blank" data-smartkarma-citation="entities:673:1" rel="noopener">Ramsay Health Care (RHC AU)</a> disclosed that the <a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; Co Inc (KKR US)</a> consortium withdrew its indicative proposal but remains committed to the alternative proposal, which the Board earlier rejected. </li>
<li>The alternative proposal, while inferior to the indicative proposal, is still attractive and better than the status quo of no deal. The Board will engage for an improved offer. </li>
<li>The value gap between the parties is not huge, and a deal is possible. The upside (20% to alternative proposal) vs downside (-9% to undisturbed price) is worth a punt. </li>
</ul>



Ramsay Health Care (RHC AU) disclosed that the KKR &amp; Co Inc (KKR US) consortium withdrew its indicative proposal but remains committed to the alternative proposal, which the Board earlier rejected. 
The alternative proposal, while inferior to the indicative proposal, is still attractive and better than the status quo of no deal. The Board will engage for an improved offer. 
The value gap between the parties is not huge, and a deal is possible. The upside (20% to alternative proposal) vs downside (-9% to undisturbed price) is worth a punt. 


<ul>
<li>
<a href="https://www.smartkarma.com/entities/ramsay-health-care-ltd" target="_blank" data-smartkarma-citation="entities:673:1" rel="noopener">Ramsay Health Care (RHC AU)</a> notes that discussions with KKR are ongoing, but the indicative proposal is held up by due diligence access to <a href="https://www.smartkarma.com/entities/ramsay-generale-de-sante" target="_blank" data-smartkarma-citation="entities:21473:1" rel="noopener">Ramsay Generale de Sante (GDS FP)</a>.</li>
<li>KKR proposed an alternative proposal that the Board rejected as “<em>meaningfully inferior.</em>” KKR remains interested, and its shenanigans are likely a move to nudge down the price.</li>
<li>At the last close, the risk/reward profile is favourable as the downside due to a deal break (-3% estimated decline) is lower than the upside (+20%) to the indicative proposal.</li>
</ul>



Ramsay Health Care (RHC AU) notes that discussions with KKR are ongoing, but the indicative proposal is held up by due diligence access to Ramsay Generale de Sante (GDS FP).
KKR proposed an alternative proposal that the Board rejected as “meaningfully inferior.” KKR remains interested, and its shenanigans are likely a move to nudge down the price.
At the last close, the risk/reward profile is favourable as the downside due to a deal break (-3% estimated decline) is lower than the upside (+20%) to the indicative proposal.


Ramsay's Overdue Update on the KKR Proposal

Malaysia

KPJ Healthcare Berhad is an investment holding company. Through its subsidiaries, the Company operates specialist medical centers and also provides pathology and laboratory services, hospital management services, drug and medical distribution along with operating a nursing college.

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KPJ Healthcare (KPJ MK)

PT Bundamedik Tbk (BMHS IJ): Growing Core Business; Eyeing Mid-Teens Revenue Growth in 2023

Bundamedik recorded 17% revenue growth in core business in 2022. The company aims to achieve 17% revenue growth and 23–24% EBITDA growth in 2023,...

Tina Banerjee