KUALA LUMPUR: Kenanga Investment Bank Research keeps its underweight call on healthcare, building materials and neutral on ports & logistics, aviation, Malaysian REITS, plastics and packaging and media.
In its strategy report issued on Monday it expected healthcare to be dull in terms of earnings growth and further capped by expensive valuations.
“However, we still believe that the healthcare industry will continue to enjoy stable growth, supported by the growing healthcare expenditure, rising medical insurance and an ageing population demographic.
“We like KPJ (Outperform, TP: RM1.15) because: (i) start-up costs from new openings will be absorbed by incremental ramp-ups from earlier openings and steady contributions from matured hospitals, and (ii) the stock is currently trading at 20% and 40% discounts compared to historical average of 27.5 times and regional peers of 35 times, respectively, ” it said.
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