Analisa Saham MIKA | 23 Mei 2018

Mitra Keluarga Karyasehat
Rebasing expectations post Kasih Group inclusion
■ The decline of 10% yoy in 1Q18 earnings brought MIKA’s results slightly below
consensus/CIMB full-year forecasts at 24%/23%.
■ Its patient volume grew by 26% yoy in 1Q18 (vs. SILO’s 14%), boosted by Kasih
Group. Meanwhile, private patient volume inched up 0.4% yoy in 1Q18.
■ We believe the shift to BPJS from private patients as its growth driver will challenge
MIKA’s profitability in the near term.
■ We project MIKA’s FY18F earnings to fall 8% yoy. Maintain Hold with a lower DCFbased
target price of Rp1,700 (WACC 9%, LTG 5.2%).
Inclusion of Kasih Group brought 1Q18 earnings down 10% yoy
MIKA’s 1Q18 earnings declined by 10% yoy to Rp166bn, slightly below at 24%/23% of
consensus/CIMB full-year forecasts. GPM dipped 1% pt yoy in 1Q18 due to the inclusion
of Kasih Group, which has a c.5-10% lower GPM than its private practice. In 1Q18, Kasih
Group contributed c.9% to MIKA’s sales. 1Q18 opex rose 1.4% pts yoy to 18.7% but the
EBIT margin slipped to 28.1% in 1Q18 (vs. 1Q17’s 30.4%). 1Q18 EBITDA and net
margin stood at 32.5% (vs. 1Q17’s 34.7%) and 23.9% (vs. 1Q17’s 29.3%), respectively.
Private patient volume struggled; boosted by BPJS exposure
1Q18 patient volume improved by 26% yoy (vs. SILO’s 14%). Such stellar growth was
supported by Kasih Group, where outpatient/inpatient volume grew 3%/28% yoy in 1Q18.
Meanwhile, private patient volume climbed 0.4% yoy in 1Q18. Private inpatient declined
c.4% yoy in 1Q18 and revenue per inpatient gained only 0.8% yoy despite ASP hikes of
c.5% earlier this year. This suggested that patients still preferred the cheaper option (i.e.
BPJS) for recurring treatment. Private outpatient volume rose 4% yoy in 1Q18.
Kasih Group profitability improves
In 1Q18, Kasih Group recorded an EBITDA margin of 17.5% (vs. 4Q17’s 15.3%). This
was thanks to MIKA’s standardised drug procurement, which was implemented in two out
of Kasih’s seven hospitals. Nevertheless, MIKA maintained its 16-17% EBITDA margin
target for Kasih Group in FY18F to avoid the seasonality effect. We project Kasih Group’s
EBITDA margin to be 16.5% in FY18F, bringing MIKA’s EBITDA margin to 32.6% in
FY18F (vs. FY17’s 34.7%).
Late BPJS acceptance and hospital opening
MIKA had planned to open MIKA Gading Serpong in Mar/Apr 18 and convert four of its
hospitals into BPJS providers at the start of FY18F. Up to May 18, the permit approval for
Gading Serpong is pending while its BPJS acceptance in Depok could be delayed to
Aug/Sep 18. This underpins our lower sales growth projection for MIKA of 12% in FY18F
(vs. previously 18%). We also cut our FY18F EPS by 14% on the back of higher opex
from the opening of 2 new hospitals this year (i.e. Gading Serpong and Bintaro).
Lacking growth drivers; maintain Hold
Having de-rated 32% from its mean to 26x FY18F EV/EBITDA (-1.75 s.d. from 5-year
mean), MIKA remains susceptible to growth pressure as it shifts to BPJS to drive growth.
This may lead to earnings risk before its growth is rebased. At our forecast of an 8%
decline in EPS in FY18F, we maintain Hold and our lower DCF-based TP of Rp1,700
implies 24x FY18F EV/EBITDA (-2 s.d. from its 5-year mean). A downside risk is lower
patient volume while upside risks are better-than-expected profits from Kasih Group.

Patricia GABRIELA
T (62) 21 3006 1734
E patricia.gabriela@cgs-cimb.com