MIKA - Better performance in ‘24F on higher patients’ growth

KBVS Update
Friday, 31 May 2024

MIKA: Better performance in '24F on higher patients' growth 
(Re-initiate BUY - TP: IDR3,400)

MIKA' revenue could grow by 14.6% yoy '24F on higher revenue from its inpatients and outpatients yoy amidst continuous unpredictable weather. Moreover, Mika plans to add around 250-300 beds (includes 200 for its Kasih’ hospitals). Thus, we expect MIKA’ revenue from its inpatients and outpatients could grow by 13.6% yoy and 16.7% yoy, respectively in ‘24F due to expectation on higher BOR with more operational beds, inpatient’ days and outpatient’ visits.

Furthermore, MIKA plans to give a more premium services in its Kasih’ hospitals, despite no new hospitals opening this year. Along with government’ COB split bill scheme for patients and better cost management, we expect MIKA’ gross profit and EBITDA could grow by 17% yoy and 17.4% yoy, respectively in ‘24F.

All in all, MIKA could grow its net profit by 18.1% yoy in ‘24F. Also expect MIKA’ gross, EBITDA and net margin to expand to 50.9%, 36% and 22.1%, respectively in ‘24F.

MIKA' revenue reached IDR1.24 tn (+21% yoy/+12.3% qoq) in 1Q24, driven by higher revenue from inpatient (+23.2% yoy/+12.5% qoq) and outpatient (+16.6% yoy/+11.8% qoq) on higher case of dengue fever amidst unpredictable weather, in 1Q24. All in all, MIKA' earnings reached IDR289 bn (+25.4% yoy/+25.5% qoq), with 80bps yoy/240bps qoq net margin expansion.

We re-initiate our coverage on MIKA with a Buy and TP of IDR 3,400/share, which implies 27.5x ‘24F EV/EBITDA or at +1.5 stdv of its 5 years mean EV/EBITDA. Currently, MIKA is trading at 23.4x ‘24F EV/EBITDA or slightly above its 5 years’ mean EV/EBITDA.

Best regards,
Andre Suntono
KBVS Research team