KUALA LUMPUR: Sunway Healthcare Holdings Bhd (SHH) is doubling down on expansion, talent development and its integrated township model to sustain growth, as demand for private healthcare and medical tourism continues to rise.
At the same time, the group does not expect ongoing geopolitical tensions in the Middle East to significantly impact its medical tourism segment this year.
Chief financial officer Chelsea Cheng said the company remains largely insulated as its patient base is concentrated within the region.
“At this moment, we are pretty much shielded and remain confident about our medical tourism outlook for the year,” she said, noting that most inbound patients come from Asean and China, including Indonesia, Cambodia and India.
Founder and chairman Tan Sri Dr Jeffrey Cheah said the group is confident it can scale its hospital network, backed by a proven operating model and long-term investments in talent and infrastructure.
“We are going to expand more hospitals into the future, and we are very confident that they will also do very well,” he said, adding that the group must “work harder to stay at the top” following strong investor response.
SHH debuted strongly on Bursa Malaysia’s Main Market, opening at RM1.70 per share – 17.2% above its IPO price of RM1.45, with an opening volume of 36.2 million shares at 9am yesterday. It closed at RM1.85.
The IPO raised RM3.3 billion, including the overallotment option, marking Malaysia’s largest listing in nine years and the second-largest healthcare IPO in Asean.
Of this, RM833.8 million was raised from the issuance of 575 million new shares. Proceeds will primarily fund expansion, with RM554.1 million (66.5%) allocated to hospital development to enhance capacity and market position.
A further RM249.7 million (29.9%) will be used to partially redeem Tranche 2 and fully redeem Tranche 3 of its Sukuk Wakalah, which financed the acquisition and development of key Sunway Medical Centre facilities in Kuala Lumpur, Damansara, Ipoh and Penang.
The remaining RM30 million (3.6%) is set aside for listing expenses.
The healthcare arm’s strategy comes amid structural tailwinds, including an ageing population, rising healthcare awareness and Malaysia’s growing appeal as a regional medical tourism hub.
A key pillar of SHH’s growth lies in its ability to attract and retain skilled medical professionals, a persistent challenge across the global healthcare industry.
Cheah acknowledged the ongoing brain drain but noted early signs of reversal.
“We have lost a lot of talent, but now it is reversing,” he said.
“We are engaging Malaysians from top hospitals like Mayo Clinic and Melbourne. They are coming back because we have created an ecosystem for them to practise.”
He added that Sunway’s willingness to invest in advanced medical equipment and facilities has strengthened its appeal among returning specialists.
“Any machine that they have in other hospitals, we have. And now it is the clinicians. We train our own nurses, we train our own doctors,” he said.
President Lau Beng Long said human capital remains central to the group’s long-term positioning, despite rising cost pressures.
“We pay among the best in the country for nurses, which drives up our costs, but that is necessary to stem the outflow to Singapore and the Middle East,” he said.
He added that the group continues to attract foreign-trained Malaysian doctors seeking a conducive environment to practise.
“They want a hospital with the ecosystem and supportive services to replicate what they have experienced abroad. Because of our set-up, we are able to attract them back,” he said.
Beyond talent, SHH is leveraging its integration within Sunway townships as a differentiator.
Lau noted that all five existing hospitals are embedded within mature developments, benefiting from built-in population catchments and infrastructure.
“We are not a standalone operator. We are part of a larger ecosystem, such as property, education, and hospitality, all working together to support healthcare delivery,” he said.
This model is being replicated in upcoming projects, including new hospitals in Seremban, Putrajaya, and Iskandar Malaysia, as well as potential developments in Penang and Kota Bharu.
The group’s expansion strategy combines brownfield and greenfield developments, with a strong track record of quickly ramping up new hospitals.
According to Lau, newer facilities have achieved profit milestones within a relatively short timeframe.
“In some cases, we achieved earnings before interest, tax, depreciation and amortisation (EBITDA) positive within eight to nine months, and profit before tax within about a year,” he said.
At the same time, SHH is navigating cost pressures within the healthcare ecosystem, particularly following regulatory measures to cap insurance premiums.
Lau said the group has increased discounts to patients as part of efforts to manage affordability.
“The overall discount has risen from about 10% to close to 13% of gross revenue,” he said. “This is part of our responsibility to help contain medical inflation.”
The group is also rolling out bundled pricing for procedures such as cataract surgery and endoscopy to provide greater cost certainty, alongside discount programmes for senior citizens.
Despite these measures, SHH maintains that its strong brand, growth trajectory and operational track record justify its market positioning.
“Because of our expansion and consistent growth, we are able to give investors confidence,” Lau said.
As competition intensifies in Malaysia’s private healthcare space, SHH’s ability to execute its expansion pipeline while balancing cost pressures and maintaining service quality will be key to sustaining its momentum.
“We have gone through the learning curve. We know exactly what to do,” Cheah said.
“What we promise, we deliver.”
Meanwhile, in its report, Berjaya Research Sdn Bhd said SHH could be worth RM1.56, about 7.6% higher than its IPO price, based on future earnings estimates.
“Our valuation is benchmarked against its closest local healthcare services peers listed on Bursa Malaysia.
“While similar companies are valued at 13 to 16 times their expected 2027 earnings, we assign a higher valuation to Sunway Healthcare due to its stronger growth and proven profitability, particularly from its newly opened hospitals.
“We anticipate earnings growth to remain robust beyond 2028, driven by its greenfield expansion pipeline in Seremban, Iskandar Puteri and Putrajaya, which is expected to more-than-double of total licensed beds to over 3,400 by 2032, from 2024 levels.
“We expect SHH’s profits to dip slightly in 2025 before rebounding strongly in 2026 and 2027, supported by steady margins, although higher investment spending may weigh slightly on profitability,” the research firm said.
