Lately, I've noticed many people around me falling sick. The rainy season often brings with it seasonal illnesses, but we shouldn’t take any symptoms lightly,
they might be signs of something more serious.
That’s why it’s so important to
get your health checked at a trusted lab. One that I highly recommend is
Prodia.
Speaking of Prodia, it seems like they’re starting to bounce back towards the end of this year. After a challenging 2024, the
last two quarters have shown an improvement in both patient numbers and revenue.
Prodia’s revenue grew slightly to
IDR 566 bn in 3Q24, up
3.8% qoq and 3.1% yoy. This growth was driven by an increase in lab tests, which reached
4.9 mn tests in 3Q24,
rising 3.5% yoy and 5.3% qoq.
In 4Q24, the recovery trend seen in 3Q24 is likely to continue, especially with
seasonal demand from corporate clients.
Prodia’s management has also hinted at potential growth in their
B2B segment through new corporate projects and promotions targeting walk-in customers. This is expected to accelerate the growth of lab tests going forward.
We believe Prodia is on track for sustainable growth. With projected
earnings growth estimated at 6% CAGR over the next five years, Prodia seems poised to return to a positive trajectory after facing challenges in 2023-2024 due to weakened purchasing power and increasing competition.
This optimism is supported by several key factors. First, Prodia continues to expand its service network. By 9M24, they had added
55 new outlets and, in parallel, developed digital platforms to reach more customers.
Second, despite rising competition, Prodia has managed to
maintain high profit margins, exceeding pre pandemic levels, highlighting their strong operational efficiency.
Additionally, their strategy to
stay competitive is evident in their focus on esoteric testing or specialized tests, which contribute more to revenue every year.
Prodia has also diversified its services by entering the clinic sector, o
pening new opportunities to expand their revenue sources.
We recommend a
BUY for PRDA stock with a target price of
IDR 3,490.
This stock is an attractive pick in Indonesia’s healthcare sector, especially with the growing public awareness of the importance of health and increasing household incomes.
On top of that, PRDA’s current stock price offers an appealing
dividend yield of around 7%, making it even more worth considering.
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