Summary: Surge in the P/E and P/B multiples (2023-2024) coincides
with KPJ achieving its highest ever PBT Margins and ROE.
KPJ Healthcare: 10-Year Financial Summary (Adjusted for Latest Capital Structure)
All monetary values in RM '000, except per-share data.
Per-share data is adjusted for NOSH of 4,363,857.
This adjusted dataset allows for a proper analysis of KPJ's valuation
metrics (like P/E and P/B ratios) over the entire 10-year period, as
if the company's current share capital had always been in place.
Calculated Financial Ratios for KPJ Healthcare
Key Observations:
Profitability (PBT & Net Margin): There is a clear trend of
significantly improving profitability from the low in 2020, withmargins in 2023-2024 reaching their highest point in the last decade.
Return on Equity (ROE): The ROE has followed a similar trajectory
to the profit margins, showing strong improvement in recent years.
The exceptionally high ROE in 2015 (38.14%) is an outlier and is
directly caused by the very low Adjusted NTA (RM 0.0923) in that
year, which significantly inflates the ratio. This low NTA is consistent
with the major capital change that occurred.
Dividend Payout (DPO): The DPO ratio has become more stable
Dividend Payout (DPO): The DPO ratio has become more stable
and higher in recent years (around 51-55%), indicating a commitment
to returning more cash to shareholders as profits have grown. The
very low DPO in 2015 (11.65%) is consistent with the capital
restructuring event that likely occurred around that time.
KPJ Healthcare: Valuation & Profitability Metrics (Adjusted)
Key Observations:
Valuation (P/E Ratio):
- The P/E ratio was extremely high in 2020 (83.76)
because earnings (EPS) fell sharply during that period, while the share
price did not drop as precipitously.
- The current P/E (33.74 for 2024) is at the high end of the historical range,
reflecting market expectations for continued strong earnings growth.
- The period from 2021 to 2023 shows a fascinating trend: as earnings (EPS)
- The period from 2021 to 2023 shows a fascinating trend: as earnings (EPS)
recovered and grew strongly, the share price initially lagged (leading to
a low P/E of 17.58 in 2022) before surging ahead (resulting in a higher
P/E of 33.74 in 2024).
Valuation (P/B Ratio):
- The P/B ratio has consistently been above 2.0 for most of the last decade,
indicating the market values KPJ at a significant premium to its book value.
- The current P/B of 4.71 is the highest in the last 10 years (excluding
- The current P/B of 4.71 is the highest in the last 10 years (excluding
the 2015 outlier), signaling very strong market confidence in the
company's future profitability and asset utilization.
- The 2015 P/B of 11.27 is an outlier, directly caused by the abnormally
low Adjusted NTA (RM 0.0923) following the capital restructuring, which
artificially inflated the ratio.
Profitability vs. Valuation:
with KPJ achieving its highest-ever PBT Margins and ROE, justifying
the market's higher valuation to a large extent.
