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