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Excellent hospital operator with prime assets and strategic urban presence. PT Sejahteraraya Anugrahjaya Tbk (SRAJ) is a prominent private healthcare operator in Indonesia, managing seven hospitals located in key urban areas such as Lebak Bulus, Kuningan (South Jakarta), and Batununggal (Bandung). These hospitals are positioned in prime locations near mid- to upper-market residential areas, enhancing accessibility and patient traffic. In February 2025, Bain Capital, a US-based private equity firm, became a shareholder, underscoring investor confidence in SRAJ’s strong asset quality, which includes wholly-owned hospitals with excellent operations, renowned doctors, and advanced medical equipment, including robotics.
Earnings recovery driven by maturing hospitals and expansions. SRAJ is poised for accelerated EBITDA growth, with a 2025-27F EBITDA CAGR of 31.0%. EBITDA margin is expected to improve by 1-3% annually starting in 2025, supported by higher case intensity and new hospital openings. In 2026F, SRAJ will open a hospital in Jakarta Garden City (Cakung) and a 150-bed facility in Lebak Bulus, followed by the Mayapada Apollo Batam International Hospital in 2027. By 2027, SRAJ’s hospitals will increase from seven to nine, with total beds rising by 42% to approximately 1,750 beds.
Healthcare infrastructure: Untapped growth potential. Indonesia's healthcare sector remains underdeveloped compared to regional peers, with medical tourism trailing Thailand (54%), Malaysia (25%), and Singapore (12%). The country faces low hospital and doctor density (figure 21, figure 22), compounded by limited government healthcare spending (6.0% of the FY25F state budget). SRAJ’s 2027 partnership with Mayapada Apollo Batam will strengthen its competitive position and support growth, particularly in medical tourism.
Speculative BUY with IDR 13,150 TP on potential MSCI large-cap inclusion. We assign a Speculative BUY rating to SRAJ, with a target price of IDR 13,150/share, reflecting a 58.4% upside from potential MSCI large-cap inclusion. This is further supported by SRAJ’s solid fundamentals, driven by its hospital network expansion. Key risks include: 1) weaker-than-expected patient volumes, 2) stronger-than-expected DXY, and 3) lower-than-expected stock liquidity.
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