JAKARTA. Hospital issuers continue to launch expansions in all over Indonesia. PT Siloam International Hospitals Tbk (SILO) will operate six new hospitals by the end of the year.
SILO also expects to expand the capacity of its hospital in Cikarang, West Java by May 2017. To date SILO has spent US$72 million of US$90 million of budgeted capital expenditure for the expansion.
SILO aims to gain IDR 1.3 trillion of additional funds by issuing 145 million of shares, which ara equal to 12.5% of paid capital. The funds will be allocated for business expansion including building 14 new hospitals, capital expenditure, and paying debts. In 2017, SILO will build 14 new hospitals.
Meanwhile, PT Sejahteraraya Anugrah Jaya Tbk (SRAJ) in 2018 will operate two new Mayapada Hospitals in Surabaya (East Java) and Lebak Bulus (South Jakarta) with the capacities of 250-300 beds and 300 beds, respectively. SRAJ plans to raise IDR1 trillion of capital for funding the expansion by conducting rights issue.
Another hospital issuer PT Mitra Keluarga Karyasehat Tbk (MIKA) has set IDR180 billion of investment plans to build six new hospitals by 2019. In other words, the total number of hospitals under MIKA will increase to 18 by 2019.
This year, MIKA will start building two new hospitals in Greater Jakarta (Jabodetabek) area. The hospitals are expected to start operating at the end of 2017.
PT Sarana Mediatama Metropolitan Tbk (SAME) has started operating the third Omni Hospital in Cikarang with the capacity of 250 beds. SAME is reported to build another hospital in Balikpapan, East Kalimantan.
Head of Research Department at First Asia Capital David Nathanael Sutyanto said that hospital sector has positive business prospect, on the grounds that the population growth will be followed by the increasing need for new hospitals.
According to David, hospital issuers are also active in finding new capital sources for business expansion. He added that SILO is the most active issuer in launching business expansion.
Analyst at Recapital Securities Kiswoyo Adi Joe said that debt ratio of the hospital issuers is relatively low, on the grounds that the hospitals generate recurring income. “The prominent hospitals have stable level of occupancy”, David said.
However, Kiswoyo suggested investors to hold the hospital issuers’ shares, because the shares are not liquid. He suggested investors to buy SILO and MIKA shares at the prices of IDR12,000 and IDR3,100, respectively. (MUHAMMAD FARID/Translator)
