Mitra Keluarga Karyasehat

1. 01Build the hospital, then wait for it to fill

   MIKA runs ~30 premium hospitals in affluent Greater Jakarta and Surabaya; a new hospital is a big capital outlay that dilutes margin until it matures.

   EconomicsMature, high-occupancy hospitals are the profit engine; young ones drag until they ramp, which is exactly why MIKA expands deliberately rather than chasing scale.

2. 02Choose the paying patient (the margin decision)

   It deliberately skews to private-pay and privately-insured patients and keeps reliance on BPJS national insurance low.

   EconomicsPrivate and insured patients pay far more than BPJS capped tariffs, so this patient mix IS the margin advantage, net margin ~25% versus lower-mix peers.

3. 03Fill the beds with high-intensity care

   High occupancy plus complex, higher-value procedures (case intensity) in mature hospitals is the utilisation engine.

   EconomicsA hospital cost base is largely fixed (staff, equipment, building), so high occupancy spreads it, which is how MIKA earns the sector best EBITDA margin at ~37%.

4. 04Run it with discipline

   Operating discipline on occupancy, case mix and staffing keeps the mature hospitals efficient.

   EconomicsOn a fixed-cost base, efficiency compounds straight into margin, which is why MIKA leads the sector on margin without chasing the fastest growth.

5. 05Self-fund the next hospital

   Free cash flow grew from ~Rp0.3tn to ~Rp1.0tn and funds expansion from cash, on a net-cash balance sheet (D/E ~0).

   EconomicsGrowth without borrowing means the 15.7–23.3% ROE is clean, not levered, and each new hospital adds capacity without adding financial risk.

Cost structureFixed-cost, occupancy-driven. The big costs, specialists, nurses, equipment and the building, are largely fixed regardless of how many patients come through. So profitability is a utilisation game: high occupancy and higher-intensity cases spread those fixed costs, which is why mature full hospitals earn EBITDA ~37% while new ones dilute until they fill. The deliberate private-pay mix lifts revenue per patient over that fixed base.

Cash cycleCash-generative and self-funding. Private and insured patients pay promptly, versus slower BPJS reimbursement, so collection is quick; with net cash, MIKA funds new hospitals from its own operating cash flow (FCF ~Rp0.3tn to ~Rp1.0tn) rather than debt. The main outflow is deliberate, measured capex on the next hospital.

Unit economicsPer hospital, it is a fixed-cost utilisation story: below a certain occupancy a hospital loses money on its fixed base; above it, each additional patient, especially a higher-intensity private-pay one, is high-margin. MIKA edge is choosing the richer patient mix AND running mature hospitals full, the two levers that produce the sector best margins.

High and unusually clean, provided you pick the right baseline. Cash backs the profit every year (operating cash flow 1.13× to 1.70× net income) and that surplus has an honest source: depreciation on hospital buildings and equipment, which climbed from 4.4% to 6.1% of revenue as new capacity opened. The tax line is reassuringly boring, net income is 75% to 81% of pretax profit in all five years, so there is none of the below-the-line noise that distorts an FX-exposed company. No accounting one-offs were found. The real comparability trap here is economic rather than accounting: FY2021 contains COVID-era work at COVID-era intensity, so treating that year as the normal run-rate makes the next two years look like decay when they were a mix reset followed by a build cycle.

Cash conversionSelf-funding by construction. Operating cash flow ran Rp2.09tn, 1.13tn, 1.31tn, 1.73tn, 1.93tn against capex of 13% to 20% of revenue, and free cash flow stayed positive in every year (Rp1.50tn, 0.31tn, 0.76tn, 1.03tn, 0.96tn) including the heaviest building years. FY2022 is the squeeze to notice: capex absorbed 73% of operating cash flow and FCF fell to Rp0.31tn, the visible cost of expanding into a revenue dip. Even then, no debt was raised.

A builder that never borrows. MIKA puts 13% to 20% of revenue back into new hospitals, pays out roughly 43% of earnings as dividends, and still reports essentially no interest-bearing debt (Rp10bn at FY2025 against Rp2.54tn of cash). That combination is only possible because a full hospital is a cash machine sitting on a fixed cost base, and it is why the FY2023 ROE trough of 15.7% should be read as the price of the next leg rather than as damage. Compare it with a harvester such as SIDO: same discipline, opposite choice about where the cash goes.

DeploymentCapex Rp0.59tn, 0.83tn, 0.55tn, 0.70tn, 0.98tn, funded entirely from operating cash flow. The signature of the build is in depreciation: 4.4% of revenue in FY2021 rising to 6.1% in FY2025, fixed cost arriving before the patients do. The signature of the payoff is in the fill: revenue +14.3% (FY2024) and +10.1% (FY2025) with gross margin 48.6% → 53.2%, the new beds filling at a better mix. Dividends were maintained throughout (payout about 43%, DPS Rp43) and retained profit still lifted owners’ equity Rp5.27tn → Rp7.25tn.

Returns trendROE 23.3% → 18.6% → 15.7% → 17.6% → 18.8%, and ROIC 14.1% → 15.8% → 16.9% for the three years the engine can compute it (FY2021 and FY2022 are omitted because no debt figure is available to form invested capital). What makes this return unusually clean: with no borrowings, none of the ROE comes from leverage, so 18.8% is what the asset base itself earns. The path is a build-and-fill curve, not a decline, returns fell while capacity was added ahead of demand and rose again as utilisation caught up.