Do you remember the term “
ber-ber-ber months”?
In Indonesia, this is the nickname for the rainy season months:
September, October, November, and December.
As these months roll around, rain becomes a regular part of daily life, along with preparations to stay healthy in the often-changing weather.
This year, the rainy season is expected to peak between
November 2024 and February 2025, with most regions in Indonesia already experiencing rain since October.
During times like these,
staying healthy is crucial. A slight oversight in health could mean contributing to hospital revenue as we close out the year.
But before we dive into tips on keeping your immune system strong, let’s take a look at one of the leading hospital companies in Indonesia,
HEAL, known for its significant contribution to BPJS services.
Among hospital stocks, HEAL stands out for its strong ability to
expand into high growth areas through
greenfield projects, like building new hospitals, and
brownfield projects, including acquiring and upgrading existing hospitals.
Hermina has also seen
robust patient volume growth, thanks to the expanding JKN coverage, while maintaining competitive profit margins.
So, how did it perform in 3Q24?
Let’s take a look.
In 3Q24, Hermina posted a profit of
IDR 125 bn, down
14.7% yoy. This decline was anticipated, as profit margins were squeezed by the opening of new hospitals in key locations like
IKN, Madiun, and Rumbai.
HEAL shows an interesting trend in its patient volume.
Inpatient days reached
492,000, up 8.8% yoy, although still below expectations due to the delayed rainy season. This unusual weather pattern led patients to postpone hospital stays.
On the other hand, HEAL’s outpatient segment saw a significant jump with a total of
2.28 mn visits, growing
10% yoy.
This increase was largely driven by
Astra Group’s extensive employee health check-up program, boosting visits during what is typically a quieter period.
Despite the weather challenges, HEAL managed to maintain double-digit growth in both inpatient and outpatient segments over 9M24. Total inpatient days reached
1.52 mn, up 23.3% yoy, while outpatient visits hit
6.52 mn, a 14.1% increase.
This steady growth underscores the success of HEAL's expansion strategy and the appeal of its quality healthcare services, bolstered by
strategic partnerships with major companies that strengthen its market position.
Hermina is also benefiting from the implementation of
COB, which a
llows patients with multiple insurance plans to leverage both benefits in a coordinated way.
Hermina’s management is optimistic that COB programs for managed care could significantly impact profitability.
If EBITDA margins for COB managed care can reach
23-25% compared to BPJS services at only
15-20%, this will be a key driver for improving Hermina’s financial efficiency.
Furthermore, based on our analysis, if around
50% of BPJS Class 1 patients switch to the COB scheme, Hermina could see an
EBITDA margin boost of approximately 74 bps.
To prepare for a broader rollout, Hermina is currently conducting an internal trial with
Asuransi Astra Buana. This includes evaluating the scheme’s readiness and setting competitive pricing for these services.
On the performance outlook, Hermina appears to be on a positive trajectory. We project Hermina’s profit to reach
IDR 623 bn in 2024 and rise to
IDR 737 bn in 2025, reflecting growth of
42% and 18% yoy, respectively.
With a well crafted strategy and strong support from its insurance partnerships, Hermina has a
solid opportunity to maximize revenue and create added value for shareholders in the future.
As we enter 4Q24, this growth momentum aligns with anticipated increases in patient volume,
positioning Hermina to move forward on a stronger foundation for the years ahead.
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