May 29 (Reuters) – KPJ Healthcare Bhd , Malaysia’s largest private hospitals provider, plans to seal at least two acquisitions of hospitals by end of this year as it expands its regional reach, its managing director said on Tuesday.
Siti Sa’Diah Sheikh Bakir told Reuters that one of the acquisitions was likely to be in Malaysia with the other in another Southeast Asian country.
The company has about 400 million ringgit ($127 million) in short-term financing to fund the purchases, she added, without disclosing the value of its potential acquisition targets.
“There are a lot of offers on the plate and we have to choose the best,” she said.
KPJ’s expansion comes as Southeast Asia’s growing populations and increasing affluence are fuelling demand for healthcare services.
Citing Myanmar as an example, Siti said residents from the second-largest country in Southeast Asia held strong purchasing power and had been attaining private healthcare services in Thailand and Malaysia.
KPJ owns 20 private hospitals in Malaysia and two in Indonesia. The company has said it plans to invest more than 1 billion ringgit to set up new hospitals in Malaysia, increasing its network to 30 hospitals over the next five years.
KPJ shares have surged some 24 percent year to date, outperforming the Malaysia’s benchmark stock index’s 1.58 percent rise.
Analysts have said the scarcity of healthcare stocks in the region has helped fuel KPJ’s share price.
KPJ’s expansion also comes as Malaysia’s state investor Khazanah Nasional Bhd plans a $1.5-$2 billion dual listing of its healthcare arm IHH Healthcare Bhd on the Malaysian and Singaporean bourses by the end of July.
“It (the listing) could stir up further interest and the valuations of healthcare operator stocks would be primed for a lift,” Maybank Kim Eng said in a research note. (Reporting By Yantoultra Ngui; editing by Stuart Grudgings)