Affin Investment Bank Research raised its target price for hospital operator KPJ Healthcare Bhd to 6.55 ringgit from 6.44 ringgit, saying the company was growing its medical tourism segment and preparing to open two new hospitals.
"For exposure to the domestic defensive and growing healthcare sector, we continue to like KPJ for its sound fundamentals, prudent and organic expansion plans," Affin said in a report on Friday. Affin maintained an 'add' rating on the company's shares.
KPJ will soon be operating 23 hospitals in Malaysia, for which it may need up to 1 billion ringgit to purchase assets. The company is expected to raise funds through bank borrowings or the issuance of bonds, said Affin. "The company's gearing level remains low at 0.3 times, it still has room to gear up for expansion," it added.
Shares of KPH were up 0.33 percent at 6.05 ringgit while the benchmark index was 0.12 percent higher at 0930 am (0130 GMT).
0930(0130 GMT) (Reporting by Al-Zaquan Amer Hamzah; Editing by Anupama Dwivedi)