MIKA - 6M25

Earnings Update 6M25

Overview

Established in 1989, MIKA is one of the leading Indonesian hospital groups. Its business lineup consists of Mitra Keluarga with 21 hospitals, Kasih Group with 10 hospitals and Medivet with a hospital and four clinics. Operationally, MIKA is supported by 4,160 operational beds with over 1,800 specialists. For FY25, there has been one completion of one hospital with another completion expected in Q3/25; while for FY26, there are two new hospitals expected to be completed. MIKA has a strong financial position with consistent dividend-paying track record. Despite its top and bottom line saw sluggish growth in H1/25, MIKA is seen retaining its positive growth in FY25.

Financial Highlights

Net revenues in 6M25 have increased by 4.5% (yoy) vs. 6M24, whilst core net profit grew by 6.5% (yoy). Both numbers were slower than those recorded in FY24, on the back of slower growth rates of both its inpatient and outpatient revenues. From the balance sheet, while total assets and core equity expanded by 9% (ytd) and 0.7% (ytd) as of June 2025, total liabilities saw a notable jump of 71.9% (ytd) due to dividend payable, account payables and other payables. This year’s dividend had been paid last July with DPS of Rp43 per share, higher than Rp34 per share paid a year earlier and representing DPR of 51% of FY24 net profit.

As of the end of June 2025, MIKA’s ROA and ROE stood at 13.5% and 18.5%, respectively. Note that excluding CCE set to be used to pay dividend payable, ROA would tick higher to 14.4%. MIKA’s gross and core net profit margins have also improved to 54.7%, and 25%, but its core operating profit margin has remained unchanged at 30.8%.

Valuation

To find MIKA’s fair value, we are utilizing three methods: the price multiples, DCF and DDM. Based on these three methods, we arrive at a blended target price of Rp2,430 per share, which implies 6.7x PRR (TTM), 28.2x PER (TTM) and 5.1x PBV (MRQ). Currently, MIKA is trading at Rp2,520 which represents PRR (TTM), PER (TTM) and PBV (MRQ) of 7.0x, 29.6x, and 5.4x, respectively. The target price also represents only 1.3% upside potential from the current price. Thus, we consider HOLD and wait to capitalize price dips to present sufficient upside potential towards the target price. In terms of risk, MIKA is facing risk on potential delays of its new hospital construction projects as well as sluggish domestic economy which may diminish purchasing power.