Revenue Growth Backed by Higher Case Intensity. In 1Q25, MIKA reported slight increase in revenue to IDR 1.3tn (+1.3% QoQ; +2.3% YoY), in line with both our and consensus estimates (SSI: 22.9%; Cons: 23.7%). The growth was driven by higher case intensity due to case mix and improved ASP. Revenue per outpatient visit rose to IDR 587,000 (+0.7% QoQ; +11.7% YoY), while revenue per inpatient day climbed to IDR 4.2mn (+7.4% QoQ; +15.1% YoY). However, the contribution of dengue-related cases to inpatient admissions declined to 4% in 1Q25 (1Q24: 8%) as patient volumes softened. Outpatient visits fell to 704,000 (-8.1% QoQ; -7.7% YoY), while inpatient admissions declined to 72,000 (-6.5% QoQ; -12.2% YoY).

 

Solid Margins Drove Earnings Growth. MIKA’s 1Q25 gross margin expanded to 54.2% (4Q24: 53.8%; 1Q24: 53.5%), supported by lower drugs and medical supplies expenses, which declined to 22.7% (4Q24: 24.0%; 1Q24: 23.8%). EBITDA margin also strengthened to 37.9% (4Q24: 37.0%; 1Q24: 37.3%), buoyed by favorable case mix as Kasih Group Hospitals continued pivoting toward private patient services. These solid numbers led to 1Q25 net profit of IDR 308bn (+12.6% QoQ; +6.6% YoY), in line with both ours and cons (SSI: 24.2%; Cons: 23.7%).

 

Strategic Expansion. In 2025F, MIKA aims to book double-digit revenue growth, supported by higher case complexity, a shift towards more profitable payer mix, and robust expansion plans. The company plans to open 4 new hospitals, 3 under the MIKA brand and 1 under the Kasih model, reflecting its strategic direction to grow its footprint in the private patient segment. 2 hospitals are scheduled for completion within this year.

 

We Maintain BUY rating as we fine-tuned our TP to IDR 3,100 (previous: IDR 3,300). We reiterate our BUY recommendation on MIKA with slightly lower TP of IDR 3,100, implying 2025F EV/EBITDA of 21.6x, due to more cautious stance of volume recovery, particularly on traffic risk from macroeconomic pressures. However, we believe MIKA’s strong portions in private segment still remain well-supported by the new Coordination of Benefits (COB) scheme. Moreover, the ongoing BPJS class standardization is expected to stimulate patient migration towards higher-tier services, particularly Class 1, which should further enhance MIKA’s financial performance. Key risks: 1) higher than expected USD/IDR, 2) weaker-than-expected case intensity.