Dr Sulaiman Al Habib Medical Group: Ramp up supports margin gains; estimates lifted

研报英文原文证据摘录

Dr Sulaiman Al Habib Medical Group: Ramp up supports margin gains; estimates lifted

d) (SAR)

indicated that Q1 seasonal (Ramadan/Eid) related volume weakness was temporary,

From To % ch Cons.

with lost volumes returning in April and strength continuing through May and June. The 12/26E 6.90 7.24 5 7.22

expansion programme is increasingly supporting earnings and a margin recovery. 12/27E 8.03 8.55 6 8.74

12/28E 9.28 9.30 0 10.00

Estimates lifted to reflect building momentum and mgmt commentary

Alexander Estefanous, CFAFollowing the stronger-than-expected 2Q26 performance, we raise our FY26 revenue

Analyst

forecast by 1.1% and EBIT margin by c140bps. Within FY26, we rebalance our H2 alex.estefanous@ubs.com

estimates, and increase Q3 revenue by 1.1%, while reducing Q4 by 4.4%, reflecting +44-20-7567 0508

stronger near-term momentum and mgmt.'s expectation that H2 should be notably

stronger than H1. We believe the outperformance reflects faster-than-expected ramp-

up at newer hospitals and greater operating leverage as utilisation improves. Thereafter,

we lift revenue by c1.1% on avg and now expect a faster margin recovery, increasing

FY27 EBIT margins by 170bps and FY28 by 70bps. FY29-30 remain broadly unchanged

as future hospital openings are expected to weigh on margins.

Valuation: is the current FY2 PE of 26x justified?

While near-term earnings growth is somewhat dependent on the chosen forecast

horizon, we believe the more relevant consideration is HMG's ability to continue

reinvesting through FY30 at attractive returns. As such, the current ~26x FY2 P/E

appears broadly justified given the HMG's expansion runway/market position, but not

sufficiently attractive to warrant a more constructive stance, particularly given the