Broad-based Improvements

MIKA ended its financial year of 2024 with its total revenues increased by 14.3% (yoy) to Rp4.9 trillion while its bottom line expanded by 25.1% (yoy) to Rp1.1 trillion. The top line performance was relatively supported by the increases of both inpatient and outpatient revenues by 13.6% (yoy) and 15.8% (yoy), respectively. In terms of profitability, margins have improved broadly on all levels with gross profit margin (GPM) , core operating profit margin (cOPM) and core net profit margin (cNPM) increased to 53.7%, 30.5%, and 23.5%, respectively compared to their standings a year earlier at 49.9%, 27.6%, and 21.5%, respectively. On a single quarter basis, the strong increase of 24.3% (yoy) in outpatient revenues in Q4/24 have driven total revenues higher by 13.4% (yoy) to Rp1.3 trillion during the period. Revenues from inpatient however, expanded by 8.1% (yoy) in Q4/24. Similarly, core net profit has also improved by 18.9% (yoy) to Rp273 billion in Q4/24 vs. Q4/23. Profitability margins in Q4/24 were also higher than those of Q4/23: GPM, cOPM, and cNPM were at 53.8%, 31.6% and 21.8%, respectively in Q4/24 vs. 50.2%, 26.9%, and 20.8%, respectively in Q4/23. Consequently, MIKA’s return on assets (ROA) and return on equity (ROE) have also improved to 13.9% and 17.6%, respectively as of the end of the FY24.

Expansions Continue...

Throughout FY24, MIKA has added 186 additional beds from existing hospitals to bring the total number of operational beds to 4,054, up by 4.8% (yoy) from the end of FY23. For FY25, MIKA expects 60-100 additional operational beds from existing hospitals, in addition to 90-110 more from new hospitals. There are two new hospitals are scheduled for opening in FY25: the first one is to have 50-60 beds initially, but will have a maximum of 200 beds later on; the second one is to have 40-50 beds initially, but will eventually have a maximum of 100 beds. Beyond FY25, there are six more sites in the pipeline with a total maximum bed capacity of 1,300 beds. Two of the six are scheduled for completion and opening in 2026 while the remaining ones are still in the process of securing the permits. On capital expenditures (capex), MIKA had spent Rp674 billion in FY24, trailing Rp800 billion-Rp1 trillion budgeted in FY24. For 2025, the budget for capex has been set at Rp1 trillion, of which we believe are likely to be financed internally.

Maintaining the Target Price

MIKA’s share price has declined by 10.9% (yoy) in 2024 and subsequently, it has further declined by 11.8% (YTD) until the end of March 2025. On the target price, we have maintained it at Rp3,525, unchanged from our previous report after taking into account the most recent financial performance in FY24. The target price implies 41.6x PER25F, 6.8x PBV25F and 9.1x PRR25F and represents a huge 46% upside potential from the current price of Rp2,240 per share. We believe that MIKA has maintained steady financial performance, debt-free status, modest dividends, and continued expansion, which are the basis of our forecast. Among  risks being faced by the Company are Government policies and regulations, human resources, as well as competition among its peers.