For QE30/9/2012, KPJ's net profit dropped by 4% q-o-q or 3% y-o-y to RM33.4 million while revenue rose marginally by less than 1% q-o-q but 11.5% y-o-y to RM531 million. The lower bottom-line was sue to higher operating expenses incurred for the start-up of two new hospitals, Bandar Baru Klang Specialist Hospital & Rumah Sakit Bumi Serpong Damai
Table 1: KPJ's last 8 quarterly results
Chart 1: KPJ's last 23 quarterly results
Aggressive expansion pipeline
KPJ has an aggressive expansion programs that include the followings:
1. Acquisition of a 80%-stake in PT KPJ medika for RM15.84 million;Valuation
2. Acquisition of a 23.7%-stake in a Thai medical group, Vejthani PCL for RM60.53 million;
3. Acquisition of a piece fo land in Kuantan by Pahang Specialist Hospital for RM3.76 million;
4. Acquisition of a piece of land in Johor Bahru by KPJSB for RM45.0 million; and
5. Acquisition of a 3-storey office c/w 1-storey warehouse by KPJSB for RM14.2 million.
KPJ (closed at RM5.90 on Friday) is now trading at a PE of 24 times (based on last 4 quarters' EPS of 24.61 sen). At this multiple, KPJ is deemed fully valued.
KPJ is in an uptrend line, with support at RM5.10. Its immediate support is at the horizontal line at RM5.90.
Chart 2: KPJ's weekly chart as at Nov 30, 2012 (Source: Quickcharts)
Based on poorer financial performance & full valuation, KPJ is rated as a HOLD. The stock is still in an uptrend and, with exciting expansion to come, the stock will still command a strong following.
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, KPJ.