ANALYSTS MIXED ON IHH'S PROSPECTS DESPITE ROBUST 1Q 2023 PERFORMANCE

KUALA LUMPUR, June 1 (Bernama) -- Analysts are mixed on IHH Healthcare Bhd’s prospects for the full financial year 2023 despite the healthcare group posting robust performance in the first quarter ended March 31, 2023 (1Q 2023).

IHH’s net profit for the 1Q 2023 jumped to RM1.39 billion from RM493.25 million posted in 1Q 2022, boosted primarily by one-off gains from the sale of International Medical University (IMU) and the strong patient volume growth.

Revenue rose 24 per cent to RM5.14 billion from RM4.16 billion previously as the group saw more patients from across its key markets, IHH said in a filing with Bursa Malaysia yesterday.

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Hong Leong Investment Bank Bhd (HLIB) said despite IHH’s results coming in line, the research house trim its full financial year 2023-2024 (FY2023-2024) forecasts slightly by four per cent due to housekeeping changes.

“We also introduce our FY2025 projections of RM1.697 billion earnings and maintain our ‘buy’ rating on IHH, but with a lower SOP-derived target price (TP) of RM7.62 (from RM7.79 previously) post trimming of forecasts.

“Post completion of the IMU disposal, we also remove the valuation of IMU from our SOP-valuation,” HLIB said in a research note today.

Meanwhile, Kenanga Research expects IHH’s revenue per inpatient growth of 10-15 per cent in 2023 versus 18 per cent in 2022 due to a low base effect in 2021, inpatient throughput growth of 10-15 per cent (10 per cent in 2022) and bed occupancy rate (BOR) of 60-73 per cent (56-70 per cent in 2022) for its hospitals in Malaysia, Singapore, India and Turkey.

“We believe the key growth factor for its inpatient throughput and BOR will be the return of elective surgeries and medical travel, the addition of new beds (previously constrained by staff shortages) and the first full-year contribution from the Atasehir hospital in Turkey.

“We maintain our forecasts and SOP-TP of RM7.00,” it added.

CGS-CIMB also maintained its ‘add’ call and SOP-based TP of RM7.33 on IHH as it believes that the healthcare group’s organic bed expansion should support better growth for the rest of the year.

It said IHH added more than 500 new beds over the past 12 months with the commencement of operations at Atasehir Hospital, the continuous ramp-up of operations at Gleneagles Hong Kong Hospital as well as the acquisition of Ortopedia Hospital and Kent Health Group in Turkey.

-- BERNAMA