KUALA LUMPUR: The entry of Sunway Medical Centre Damansara (SMCD) into Damansara's already crowded private healthcare market has sparked concerns about market positioning and potential patient fragmentation for TMC Life Sciences (TMCL) Bhd and KPJ Healthcare Bhd, according to Maybank Investment Bank (Maybank IB) Bhd.
The launch of SMCD further heightens competition in Damansara's private healthcare sector, which already features established players like Thomson Hospital, owned by TMCL, and KPJ Damansara (KPJ DSH) alongside the newly opened KPJ Damansara 2 (KPJ DSH2), both operated by KPJ Healthcare Bhd.
With these hospitals already competing for market share, the addition of SMCD raises questions about the long-term sustainability of such rapid growth, the bank noted.
Maybank IB expects TMCL to be more affected by SMCD's presence, while the impact on KPJ is anticipated to be less significant.
IHH Healthcare Bhd, which does not have a presence in Damansara, is unlikely to be impacted.
The bank said that the competition between the hospitals has become increasingly visible.
SMCD made an assertive marketing move by placing a large promotional banner directly across from Thomson Hospital, clearly signalling its intention to target Thomson's premium clientele. In response, Thomson Hospital, a long-standing player in Damansara since 2008, retaliated by putting up its own banner along the route to SMCD, creating a high-profile battle for visibility, the bank said.
Due to their overlapping patient demographics and similar market positioning strategies, Maybank IB believes Thomson Hospital is more vulnerable to competition from SMCD.
"From our recent visit, Thomson Hospital seems to be holding its ground for now with a bustling business-as-usual scene. However, we foresee a toe-to-toe match between the two due to their close proximity, similar patient demographic and value offering. This could pose some risk for TMCL in our view. Thomson Hospital contributes to 89 per cent of TMCL's financial year 2024 revenue. Thomson Hospital is the only hospital in TMCL's portfolio," it said.
The bank highlighted SMCD's focus on advanced diagnostics and imaging technologies, along with its ability to attract top specialists, which aligns with Sunway Medical Centre Sunway City's (SMSC) established niche in high-yield specialities.
"Impact to KPJ most likely to be muted. In our view, KPJ DSH and KPJ DSH2 are able to leverage KPJ's strong network of hospitals, insurance/corporate partnerships and affordability to attract and retain a broader middle- to high-income patient demographic. KPJ DSH is the most unlikely to be impacted by SMCD's entry due to its differentiated offering, target market, and established patient loyalty. Meanwhile, KPJ DSH2 remains relatively vulnerable to competition but we believe the impact on group earnings will be muted, as it is only 1 of KPJ's 29 hospitals," it said.
SMCD, built at a cost of about RM234 million, commenced operations in December 2024 as the fourth comprehensive tertiary hospital under the Sunway Healthcare Group. It is expected to complement SMSC, Malaysia's largest quaternary private hospital.
Maybank IB projects SMCD will generate RM172 million and RM218 million in revenue, along with RM34 million and RM55 million in EBITDA, for the financial years 2025 and 2026, respectively.
Despite its bold market entrance and the ongoing visibility battle with Thomson, SMCD is still in its early operational stages, it said.