In his report dated March 26, Chan notes that the REIT stands to reap the benefits from Siloam Hospitals’ status as the largest private healthcare provider in Indonesia and an “acknowledged leader of many firsts” in Indonesia’s healthcare sector. About 63% of the country’s hospital market is made up of private providers. Siloam covers an estimated 9% share in these private hospitals.
Analysts are generally positive about First REIT’s prospects after visiting its four hospitals in Jakarta last week. The hospitals, Mochtar Riady Comprehensive Cancer Centre (MRCCC), Siloam Hospitals Lippo Village, Siloam Hospitals Kebon Jeruk and Siloam Hospitals TB Simatupang, are operated by Indonesia-listed Siloam International Hospitals.
Following the visit, Lim & Tan Securities analyst Chan En Jie has maintained his “accumulate” call with an unchanged target price of 30 cents, pegged to a forward yield spread of 2.6% and 0.5 standard deviations (s.d.) of its five-year average.
