Mitra Keluarga Karyasehat

Stock Quote Mitra Keluarga Karyasehat - MIKA:

Business Summary

Mitra Keluarga Karyasehat is one of Indonesia's leading healthcare providers in the Greater Jakarta area, Surabaya (East Java) and Tegal (Central Java) with a solid operational and financial track record. It owns eight hospitals in the Greater Jakarta area, three in Surabaya and one in Tegal, all accredited by the Indonesian Commission on Accreditation of Hospitals (KARS). Seven of the hospitals are categorized as class B, the highest class Indonesian private hospitals can attain.

In terms of number of patients, Mitra Keluarga is Indonesia's largest hospital operator, treating over 2 million patients in 2014. In terms of (inpatient) bed capacity, it is the second-largest Indonesian hospital operator, having 1,953 beds at end-2014.

In March 2015 the company was listed on the Indonesia Stock Exchange. Mitra Keluarga Karyasehat stated that - starting from 2015 - it intends to pay dividends to shareholders at a rate of at least 25 percent of its consolidated net income (subjected to the company's cash flow and investment plans).

Strengths of Mitra Keluarga Karyasehat:

• Good track record and long experience in hospital management
• Sufficient cash reserves to expand business operations
• The hospital sector has a high barrier for new entries
• The government is committed to make healthcare services accessible for the population
• Indonesia's expanding middle class is increasingly aware of the advantages of healthcare services (and has the financial resources to use these services)
• Healthcare spent per capita is still low, hence ample room for growth

Weaknesses of Mitra Keluarga Karyasehat:

• Limited capacity; already has a high bed capacity in existing hospitals
• Weak rupiah causes purchases of medical equipment to become more expensive
• Scarcity of high-quality medical staff

Financial Highlights Mitra Keluarga Karyasehat:

	2012	2013	2014	2015	2016
Revenue	1,475.4	1,742.1	1,945.5	2,140.7	2,435.5
Gross Profit	594.4	737.3	864.6	972.3	1,155.8
Net Income	289.0	398.6	518.8	566.8	695.4
Income before Tax	390.0	530.0	669.4	739.8	896.3
EBITDA	469.0	591.0	668.0
Total Assets	1,672.4	2,133.9	2,156.8	3,719.8	4,176.2
Total Liabilities	338.8	399.2	400.5	440.8	539.8
Earnings per Share¹	21	29	38	39	48
Cash Dividend per Share¹				20	25

^{in billion IDR rupiah unless otherwise stated
¹ in IDR rupiah
Sources: Mitra Keluarga Karyasehat, Annual Report 2016}

Hospital Operator Industry Indonesia

Indonesia contains nearly 2,400 hospitals (a bed capacity of over 290,000), with approximately 67 percent being government-owned and non-profit organization hospitals. In terms of geographical location, most of Indonesia's hospitals are located on Java, Indonesia's most populous island.

In the last few years, private hospital operators have been the driving force behind expansion of Indonesia's hospital industry. However, the country's bed-to-patient ratio (0.9) is still among the lowest in the ASEAN region in 2014 (in Malaysia and Thailand this ratio is 1.9 and 2.1, respectively, while the global average is 2.5). Similarly, Indonesia's doctor-to-patient ratio per 1,000 people is also among the lowest in the region at 0.3.

The aforementioned basically indicates that the current state of Indonesia's healthcare services is inadequate, particularly given that demand is expected to grow strongly in the future due to the nation's economic growth, the rapidly expanding middle class and urbanization.

Mitra Keluarga Karyasehat was the second hospital operator to conduct an initial public offering (IPO) on the Indonesia Stock Exchange. The first operator to make this move was Siloam International Hospitals, Indonesia's largest hospital operator.

Projection Future Corporate Earnings of Mitra Keluarga Karyasehat:

	2018	2019F	2020F	2021F
Net Revenues	2,713.0	3,139.0	3,383.0	3,594.0
EBITDA	880.0	1,047.0	1,119.0	1,189.0
Net Profit	614.0	727.0	752.0	787.0
P/E Ratio (x)	37.1	53.1	50.6	48.3
P/BV (%)	5.5	9.2	8.7	8.1

^{in billion IDR rupiah unless stated otherwise
Source: Samuel Sekuritas (09.01.2020)}