SERI KEMBANGAN (June 30): Country Heights Holdings Bhd (CHHB) is allocating RM100 million in capital expenditure (capex) to expand and strengthen its wellness business segment, one of its top performing pillars during the Covid-19 pandemic.

The group's founder and major shareholder Tan Sri Lee Kim Yew said the Malaysian government had been championing medical tourism since before Covid-19 and had done very well in this segment even during the pandemic.

The group’s healthcare subsidiary GHHS Healthcare recorded a profit of RM3.23 million in 2021 on a turnover of RM26.72 million.

There is huge potential in this segment and hence the group targets to grow it by three or four times, he told reporters after the group’s annual general meeting here on Thursday (June 30).

“We want to reposition our group wellness business as a new branch of wellness tourism, which is a bigger market compared to medical tourism,” Lee said.

He said if one were to consider the spa, rehabilitation and the aesthetic business — among the top in the wellness segment — there is a much bigger market because clients may require a longer time to rest.

"Treatment (as in medical tourism) may take one to two weeks but when it comes to wellness tourism, it may take months and that is why we are trying to champion wellness tourism,” he shared.

On the expansion, he noted that the wellness division will expand into a new building this year with a traditional Chinese medicine hospital targeted to be launched in the second half of the year and a confinement centre targeted in 2023.

On the RM100 million capex, he said this would be utilised to enhance equipment, staff upgrading and working capital.

Lee said funds for the capex will come from the issuance of shares, asset divestments as well as joint ventures.

The group is taking steps to monetise its property stocks via the CHHB sales programme with a target sales of RM300 million.

“We have a [high level] of assets but in terms of liquidity, it is not much today. Liquidity is a challenge as we emerge from the Covid-19 impact and move into recovery. We urge banks to really look at their assessment and evaluation methods when funding a company.

“We hope it is not based on the cash flow alone. Although that is important, [companies] must also be evaluated based on sound business ideas,” he said.