MORNING CALL: 12/12/23

TA Securities has faith in IHH Healthcare’s new vision and direction

Transcript

00:00 This Tuesday morning, we'll be looking at IHH Healthcare.

00:05 TA Securities recently attended an analyst call with its group CEO, Dr Prem Kumar Nair,

00:11 who was appointed to the post in October.

00:14 The research house keeping its hold call on the stock and target price of RM6.30.

00:19 IHH ended trading yesterday at RM5.87.

00:23 So, strategy.

00:24 According to TA, IHH has two top priorities.

00:28 The first being organic expansion.

00:30 The group will be adding about 3,800 beds.

00:33 That's a 33% increase in capacity over the next five years,

00:38 mostly in India, Malaysia and Turkey.

00:40 Across the causeway, beds are packed.

00:43 So IHH Singapore is decanting into the primary care business,

00:47 moving out of departments and services such as endoscopy and fertility

00:52 to create space for higher intensity services.

00:55 Its second priority is to expand across the healthcare continuum

00:59 by growing ambulatory care offerings and improving primary care penetration,

01:04 especially in Singapore and Hong Kong.

01:06 As for its underperforming assets in China,

01:09 IHH plans to increase patient volumes via integration of referrals

01:14 between Pak Wei Shanghai Hospital and its clinics in Shanghai,

01:18 as well as refreshing its clinics, facilities and environment.

01:21 The group is looking at Indonesia and Vietnam for possible acquisitions

01:25 and expects India to be one of its key earnings drivers.

01:28 While TA isn't changing its FY23 to FY25 earnings estimates,

01:33 it believes the new vision and direction can bring IHH to the next level

01:38 in terms of profitability and operational efficiency

01:41 to remain one of the top service providers in the world.

01:45 So what does the street say?

01:47 According to the latest data available on Bursa Marketplace,

01:50 there are 16 buys and 4 holds on the stock.

01:53 Average target price is RM7.02.

01:56 IHH last closed at RM5.87, so that's a potential return of almost 20%.

02:02 [Music]