PETALING JAYA: IHH Healthcare Bhd
plans to add over 4,000 new beds while maintaining a tight rein on costs while leveraging operational synergies to mitigate inflationary and staff-cost pressures.
The need to add new beds in its hospitals is driven by strong underlying demand, and the healthcare group aims to add 33% or close to 4,000 new beds over the next five years, said TA Research in a report.
RHB Research, meanwhile, is upbeat on IHH’s strategic plan to drive growth organically and inorganically over the mid to long term.
The group’s bed expansion target of 4,000 beds by 2028 – primarily in developing markets such as Malaysia and India – could offer IHH the opportunity to tap into regions where quality healthcare remains scarce.
According to Kenanga Research, the key growth factor for IHH’s inpatient throughput and bed occupancy rates (BOR) would be revenue intensity from a case mix with more acute cases, medical tourists and the addition of the new beds, which were previously constrained by staff shortages that are gradually easing.
The research house also expects sustained performance in Malaysia, while staff shortages in Singapore have been resolved.
There has also been a return of Middle Eastern and Central Asian medical tourists to the group’s hospitals in Turkiye and India.
The research house expect IHH’s revenue growth per inpatient at 12%-16% (versus an estimated 19% in 2023 due to the low-base effect in 2022), inpatient throughput growth of 9%-12% (versus an estimated 7% in 2023).
It expects a BOR of 65%-73% (versus an estimated averaging 65% in 2023) for its hospitals in Malaysia, Singapore, India and Turkiye.
Meanwhile, MIDF Research has made no changes to IHH’s earnings forecasts and reiterated its optimism about IHH’s long-term growth trajectory.
The researh house also maintained a “buy” call on IHH with a target price of RM7.35 a share.
HLIB Research raised its financial year 2024 (FY24) and FY25 forecast by 16% and 23%, respectively, as it lifted its revenue assumptions, especially in Singapore, Turkiye and Europe.
The brokerage firm maintained a “buy” call on the stock, but reduced its target priceto RM7.21 a share.
TA Research kept a “hold” recommendation on the stock with a target price of RM6.65, while Kenanga Research has an “outperform” call with a target price of RM7.
RHB Research raised its 2024-2025 earnings forecasts by 1% each and maintained a “buy” with a higher target price of RM7.90.
The key risks to its call include lower-than-expected patient volume/revenue intensity and higher-than-expected operating costs.
