Sunway’s healthcare arm eyes Southeast Asia expansion

KUALA LUMPUR (Feb 27): Sunway Healthcare Holdings Bhd (SHH) is exploring opportunities to expand to Southeast Asian nations as part of its longer-term regional growth strategy, said executive chairman Tan Sri Dr Jeffrey Cheah. (pictured)

The group, which operates more than 1,800 licensed beds across its five hospitals nationwide, has not set a timeline for its overseas foray but is actively evaluating potential markets, said Cheah who is the founder of Sunway Group.

“We have established a very strong footing in our own country. But investing abroad comes with different cultures, work ethics and regulatory frameworks, so we must proceed carefully,” he said at a press conference after the healthcare arm’s prospectus launch on Friday.

Citing past examples, Cheah noted that many large corporations have incurred heavy losses in foreign markets, including in China, while few Malaysian companies have generated consistent returns from overseas ventures.

“That is why we have to be very careful. The intention to go regional is there, but there is no fixed timeline at this stage,” he added.

SHH president Datuk Lau Beng Long said the group will prioritise domestic expansion in the near term, with plans to acquire suitable land in East Malaysia and Pahang for new hospital developments.

SHH is among the largest private hospital groups in Malaysia, with 1,805 licensed beds and a total bed capacity of 1,982, anchored by its flagship 848-bed Sunway Medical Centre in Sunway City Kuala Lumpur. It also has presence in Penang and Ipoh.

When asked about the potential impact of the government’s impending diagnosis-related group (DRG) payment model on the group’s profitability, SHH chief financial officer Chelsea Cheng said it is still premature to determine the financial implications.

“The regulatory framework is still evolving. We are unable to share further details at this juncture as we are awaiting additional directives from the Ministry of Health (MOH). The MOH is currently collecting data from private hospitals, and we are cooperating fully to support the rollout,” she said.

SHH is raising up to RM2.86 billion from its initial public offering (IPO) at RM1.45 per share, ahead of its Main Market listing scheduled for March 18—the country’s largest listing in nine years.

The IPO comprises up to 1.97 billion shares, including an offer for sale of up to 1.39 billion existing shares and a public issue of 575 million new shares to retail and institutional investors.

A total of 1.62 billion shares are allocated to institutional investors, while 345 million shares are set aside for the retail tranche.

At the IPO price of RM1.45 and based on its enlarged share capital of 1.97 billion shares, SHH would command a market capitalisation of RM16.7 billion. This translates into a price-earnings ratio of 64.8 times and an enterprise value-to-Ebitda multiple of 36.1 times, based on its net profit of RM257.5 million for the financial year ended Dec 31, 2024.

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