Jupiter2017
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IHH Healthcare *Official* (SGX: Q0F)
Creating a new thread since cannot find existing thread.
Creating a new thread since cannot find existing thread.
IHH Healthcare *Official* (SGX: Q0F)
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Jupiter2017
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http://www.businesstimes.com.sg/com...es-on-higher-costs-from-new-hospital-openings
IHH Q3 net profit plunges on higher costs from new hospital openings
Mon, Nov 27, 2017 - 6:59 PM Claire Huang huangjy@sph.com.sg
MAINBOARD-LISTED IHH Healthcare Berhad's third-quarter net profit plunged on the back of higher costs from depreciation and amortisation, as well as finance costs led by the opening of Gleneagles Hong Kong Hospital and Acibadem Altunizade Hospital.
In a filing to the bourse operator on Monday, the healthcare provider said net profit for the three months as at end-September fell 53 per cent year-on-year to RM82.1 million (S$27 million), dented by the expected start-up costs arising from the opening of the new hospitals. Excluding the exceptional items, net profit dropped 42 per cent to RM125.4 million.
Revenue for the quarter rose 15 per cent year-on-year to RM2.8 billion, driven by sustained growth in inpatient admissions and revenue intensity across most home markets, as well as the ramp-up of new hospitals opened in March 2017.
IHH said Tokuda Group and City Clinic Group in Bulgaria, acquired in June 2016 and since consolidated into Acibadem, also contributed to the higher revenue.
Earnings before interest, tax, depreciation, amortisation, exchange differences and other non-operational items (Ebitda) grew 3 per cent to RM562.4 million in Q3. This, as sustained operational growth in core markets offset the impact from the start-up costs incurred by the newly opened hospitals, as well as from the higher operating and staff costs, the group said.
For the first nine months of the year, net profit jumped 33 per cent to RM868.7 million while net profit excluding exceptional items grew 36 per cent to RM413.4 million.
Revenue for the nine months went up 12 per cent year-on-year to RM8.3 billion, while Ebitda dipped 3 per cent to RM1.7 billion.
As at end-September, IHH recorded a cash balance of RM5.8 billion, indicating a healthy financial position. Net gearing stood at 0.05 times compared with 0.21 times in the year-ago period.
Said IHH managing director and chief executive Tan See Leng: "We continue to deliver topline and Ebitda growth, underlining the inherent strength of our differentiated strategy. While the start-up costs for Gleneagles Hong Kong and Acibadem Altunizade have had a short-term impact on our earnings, these were according to our plans and within expectations, creating the momentum to take us to the next level on full ramp-up next year."
He noted that the group is now well-placed to expand in Greater China as its next home market.
"We also continue to build out our cutting-edge capabilities, and now have the distinction of being the region's only private healthcare provider with in-house molecular diagnostics capabilities to customise medical treatment after acquiring Angsana Holdings," added Dr Tan.
In its outlook, IHH said it expects cost pressures in terms of wage inflation, higher purchasing costs with a stronger US dollar, higher pre-operating costs and start-up costs from new operations that would partially erode profitability in the initial stages.
To mitigate these effects, IHH said it would remain prudent in its cost management, "undertake ways to improve the mix of higher revenue intensity cases and ramp up new facilities to achieve optimal operating efficiencies".
The stock closed down four cents to S$1.83 on Monday, before results were out.
Separately, the group said its executive chairman, Abu Bakar Suleiman, will retire from his role as president of IMU Health on Dec 31 and assume an advisory role from next year. "Presently, Dr Abu Bakar is the chairman of IMU Health and will continue as such," IHH said.
The group's current non-executive deputy chairman, Mohammed Azlan Hashim, will be redesignated as non-executive chairman from Jan 1.
Price link: http://www.shareinvestor.com/fundamental/factsheet.html?counter=Q0F.SI
IHH Q3 net profit plunges on higher costs from new hospital openings
Mon, Nov 27, 2017 - 6:59 PM Claire Huang huangjy@sph.com.sg
MAINBOARD-LISTED IHH Healthcare Berhad's third-quarter net profit plunged on the back of higher costs from depreciation and amortisation, as well as finance costs led by the opening of Gleneagles Hong Kong Hospital and Acibadem Altunizade Hospital.
In a filing to the bourse operator on Monday, the healthcare provider said net profit for the three months as at end-September fell 53 per cent year-on-year to RM82.1 million (S$27 million), dented by the expected start-up costs arising from the opening of the new hospitals. Excluding the exceptional items, net profit dropped 42 per cent to RM125.4 million.
Revenue for the quarter rose 15 per cent year-on-year to RM2.8 billion, driven by sustained growth in inpatient admissions and revenue intensity across most home markets, as well as the ramp-up of new hospitals opened in March 2017.
IHH said Tokuda Group and City Clinic Group in Bulgaria, acquired in June 2016 and since consolidated into Acibadem, also contributed to the higher revenue.
Earnings before interest, tax, depreciation, amortisation, exchange differences and other non-operational items (Ebitda) grew 3 per cent to RM562.4 million in Q3. This, as sustained operational growth in core markets offset the impact from the start-up costs incurred by the newly opened hospitals, as well as from the higher operating and staff costs, the group said.
For the first nine months of the year, net profit jumped 33 per cent to RM868.7 million while net profit excluding exceptional items grew 36 per cent to RM413.4 million.
Revenue for the nine months went up 12 per cent year-on-year to RM8.3 billion, while Ebitda dipped 3 per cent to RM1.7 billion.
As at end-September, IHH recorded a cash balance of RM5.8 billion, indicating a healthy financial position. Net gearing stood at 0.05 times compared with 0.21 times in the year-ago period.
Said IHH managing director and chief executive Tan See Leng: "We continue to deliver topline and Ebitda growth, underlining the inherent strength of our differentiated strategy. While the start-up costs for Gleneagles Hong Kong and Acibadem Altunizade have had a short-term impact on our earnings, these were according to our plans and within expectations, creating the momentum to take us to the next level on full ramp-up next year."
He noted that the group is now well-placed to expand in Greater China as its next home market.
"We also continue to build out our cutting-edge capabilities, and now have the distinction of being the region's only private healthcare provider with in-house molecular diagnostics capabilities to customise medical treatment after acquiring Angsana Holdings," added Dr Tan.
In its outlook, IHH said it expects cost pressures in terms of wage inflation, higher purchasing costs with a stronger US dollar, higher pre-operating costs and start-up costs from new operations that would partially erode profitability in the initial stages.
To mitigate these effects, IHH said it would remain prudent in its cost management, "undertake ways to improve the mix of higher revenue intensity cases and ramp up new facilities to achieve optimal operating efficiencies".
The stock closed down four cents to S$1.83 on Monday, before results were out.
Separately, the group said its executive chairman, Abu Bakar Suleiman, will retire from his role as president of IMU Health on Dec 31 and assume an advisory role from next year. "Presently, Dr Abu Bakar is the chairman of IMU Health and will continue as such," IHH said.
The group's current non-executive deputy chairman, Mohammed Azlan Hashim, will be redesignated as non-executive chairman from Jan 1.
Price link: http://www.shareinvestor.com/fundamental/factsheet.html?counter=Q0F.SI
Jupiter2017
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http://www.businesstimes.com.sg/com...et-prices-but-maintain-ihh-healthcare-ratings
Brokers' take: Analysts cut target prices but maintain IHH Healthcare ratings
Tue, Nov 28, 2017 - 11:13 AM Rachel Mui rachmui@sph.com.sg
ANALYSTS from CIMB and UOB Kay Hian have reduced their target prices for IHH Healthcare as the firm's third-quarter earnings came in below estimates, with startup losses associated with expansion still the main earnings drag.
CIMB reduced its target price to RM6.36 per share from RM6.99 and kept its "add" rating on the stock, while UOB Kay Hian reduced its target price to S$1.71, down from S$1.73, and maintained its "hold" rating.
As at 10.46am on Tuesday, IHH Healthcare was trading 1.09 per cent lower at S$1.81 apiece.
CIMB noted that the firm's earnings before interest, taxes, depreciation and amortisation (Ebita) was largely eroded by the RM69 million (S$22.6 million) startup costs from Gleneagles HK (GHK), which resulted in a 42.4 per cent drop in core net profit. This figure formed only 47 per cent of their consensus estimates. Similarly, UOB Kay Hian noted that year on year (y-o-y), costs remained high for the firm due to higher depreciation, finance costs and staff costs.
However, IHH continues to record a "double-digit y-o-y improvement in average revenue per inpatient admission for both its Singapore and Malaysia operations, thanks to its strong appeal to foreign patients particularly from Indonesia and Indo-China", CIMB said.
Likewise, UOB added that Singapore and Malaysia have performed well on high intensity cases, with IHH recording a 25 per cent y-o-y increase in revenue from Indonesian patients for the third quarter this year. In Malaysia, the firm's nine-month 2017 revenue also rose by 11.1 per cent from the preceding year.
"This was largely due to the ramp-up of centres of excellence, improvement of clinical outcomes as well as upgrade of equipment and facilities at the hospitals," UOB said.
While GHK, which opened in March this year, is still loss making, CIMB said that its Ebita loss narrowed for the third quarter this year. Therefore, the broker "remains positive on its continual ramp-up in operations (especially more complex procedures) and month-on-month growth in patient load". It expects GHK to reach Ebita breakeven in fiscal 2019.
Looking ahead, IHH remains on track in its China expansion plans, starting with Chengdu, Nanjing and Shanghai in late 2018 to 2020.
"Its 350-bed capacity Chengdu hospital will first open with 80-100 beds and an estimated 40-50 doctors. We expect some pre-opening expenses from H2 FY18 onwards, but do not think that this will be extensive given the 'asset-light' model and 49 per cent ownership," CIMB said.
It added that the firm's recent issuance of US$500 million perpetual bonds is a "sizeable war chest for the group to pursue more aggressive M&As in the near-term". Although potential M&As (mergers and acquisitions) are a key catalyst, CIMB said that downside risk could stem from poor overseas execution.
Similarly, while UOB noted that IHH's near-term earnings may be negatively affected by expansion plans, it remains positive on the long-term prospects of the firm because of growth in China, Hong Kong and India.
Brokers' take: Analysts cut target prices but maintain IHH Healthcare ratings
Tue, Nov 28, 2017 - 11:13 AM Rachel Mui rachmui@sph.com.sg
ANALYSTS from CIMB and UOB Kay Hian have reduced their target prices for IHH Healthcare as the firm's third-quarter earnings came in below estimates, with startup losses associated with expansion still the main earnings drag.
CIMB reduced its target price to RM6.36 per share from RM6.99 and kept its "add" rating on the stock, while UOB Kay Hian reduced its target price to S$1.71, down from S$1.73, and maintained its "hold" rating.
As at 10.46am on Tuesday, IHH Healthcare was trading 1.09 per cent lower at S$1.81 apiece.
CIMB noted that the firm's earnings before interest, taxes, depreciation and amortisation (Ebita) was largely eroded by the RM69 million (S$22.6 million) startup costs from Gleneagles HK (GHK), which resulted in a 42.4 per cent drop in core net profit. This figure formed only 47 per cent of their consensus estimates. Similarly, UOB Kay Hian noted that year on year (y-o-y), costs remained high for the firm due to higher depreciation, finance costs and staff costs.
However, IHH continues to record a "double-digit y-o-y improvement in average revenue per inpatient admission for both its Singapore and Malaysia operations, thanks to its strong appeal to foreign patients particularly from Indonesia and Indo-China", CIMB said.
Likewise, UOB added that Singapore and Malaysia have performed well on high intensity cases, with IHH recording a 25 per cent y-o-y increase in revenue from Indonesian patients for the third quarter this year. In Malaysia, the firm's nine-month 2017 revenue also rose by 11.1 per cent from the preceding year.
"This was largely due to the ramp-up of centres of excellence, improvement of clinical outcomes as well as upgrade of equipment and facilities at the hospitals," UOB said.
While GHK, which opened in March this year, is still loss making, CIMB said that its Ebita loss narrowed for the third quarter this year. Therefore, the broker "remains positive on its continual ramp-up in operations (especially more complex procedures) and month-on-month growth in patient load". It expects GHK to reach Ebita breakeven in fiscal 2019.
Looking ahead, IHH remains on track in its China expansion plans, starting with Chengdu, Nanjing and Shanghai in late 2018 to 2020.
"Its 350-bed capacity Chengdu hospital will first open with 80-100 beds and an estimated 40-50 doctors. We expect some pre-opening expenses from H2 FY18 onwards, but do not think that this will be extensive given the 'asset-light' model and 49 per cent ownership," CIMB said.
It added that the firm's recent issuance of US$500 million perpetual bonds is a "sizeable war chest for the group to pursue more aggressive M&As in the near-term". Although potential M&As (mergers and acquisitions) are a key catalyst, CIMB said that downside risk could stem from poor overseas execution.
Similarly, while UOB noted that IHH's near-term earnings may be negatively affected by expansion plans, it remains positive on the long-term prospects of the firm because of growth in China, Hong Kong and India.
Shion
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IHH sweetens offer for India's Fortis in heated bidding war
IHH sweetens offer for India's Fortis in heated bidding war
https://www.straitstimes.com/busine...offer-for-indias-fortis-in-heated-bidding-war
SINGAPORE - Asia's largest private healthcare operator IHH Healthcare has revised its bid for cash-strapped Fortis Healthcare, which runs about 30 hospitals in India. This deal sweetener comes amid a heated bidding war with four other entities looking to secure a stake in India's second-largest hospital chain.
In its filing with the Singapore bourse on Wednesday (May 2), IHH Healthcare said its proposal for an immediate equity infusion of 650 crore rupees (S$130 million) will now be priced at 175 rupees per share, a 9.4 per cent premium from the 160 rupees apiece proposed in April.
A subsequent round of equity infusion for up to 3,350 crore rupees will also be at a share price not exceeding 175 rupees. However, this subsequent equity infusion will be subject to due diligence, and the "execution of mutually acceptable binding definitive documents", IHH Healthcare said.
The other parties vying for a piece of Fortis include TPG backed-Manipal Hospital, the Munjal and Burman families, China's Fosun International and KKR-backed Radiant Life Care.
Tuesday was the deadline for the binding offers, which will be evaluated by an expert advisory committee. Fortis' board is due to meet on May 10 to review the committee's recommendations.
In addition, IHH Healthcare noted that the revised terms of its proposal shall stand withdrawn if the company does not hear from Fortis by May 15.
As at 3.35pm on Wednesday, shares in IHH Healthcare were trading down 1.47 per cent, or three Singapore cents, to S$2.01 apiece.
IHH sweetens offer for India's Fortis in heated bidding war
https://www.straitstimes.com/busine...offer-for-indias-fortis-in-heated-bidding-war
SINGAPORE - Asia's largest private healthcare operator IHH Healthcare has revised its bid for cash-strapped Fortis Healthcare, which runs about 30 hospitals in India. This deal sweetener comes amid a heated bidding war with four other entities looking to secure a stake in India's second-largest hospital chain.
In its filing with the Singapore bourse on Wednesday (May 2), IHH Healthcare said its proposal for an immediate equity infusion of 650 crore rupees (S$130 million) will now be priced at 175 rupees per share, a 9.4 per cent premium from the 160 rupees apiece proposed in April.
A subsequent round of equity infusion for up to 3,350 crore rupees will also be at a share price not exceeding 175 rupees. However, this subsequent equity infusion will be subject to due diligence, and the "execution of mutually acceptable binding definitive documents", IHH Healthcare said.
The other parties vying for a piece of Fortis include TPG backed-Manipal Hospital, the Munjal and Burman families, China's Fosun International and KKR-backed Radiant Life Care.
Tuesday was the deadline for the binding offers, which will be evaluated by an expert advisory committee. Fortis' board is due to meet on May 10 to review the committee's recommendations.
In addition, IHH Healthcare noted that the revised terms of its proposal shall stand withdrawn if the company does not hear from Fortis by May 15.
As at 3.35pm on Wednesday, shares in IHH Healthcare were trading down 1.47 per cent, or three Singapore cents, to S$2.01 apiece.
Shion
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Shion
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IHH Healthcare sees revenue growth from two new China hospitals
IHH Healthcare sees revenue growth from two new China hospitals
https://sbr.com.sg/source/motley-fo...e-sees-revenue-growth-two-new-china-hospitals
It will also expand its hospitals in Malaysia and Turkey.
With a market capitalisation of S$16.6 billion, IHH Healthcare Bhd (SGX:Q0F) is — by far — the largest healthcare stock listed in Singapore. The group operates 49 hospitals and 30 medical centres around the world, including prominent private hospitals in Singapore, namely Gleneagles, Mount Elizabeth and Parkway.
IHH Healthcare has also initiated a few more projects that are due for completion by 2019.
The phase 2 expansion of Pantai Hospital in Kuala Lumpur, and the expansion of Acibadem Maslak in Turkey will increase the bed capacity of the hospitals by 120 beds and 195 beds, respectively. On top of that, the 350-bed Gleneagles Chengdu is slated to be opened this year. Gleaneagles Shanghai, which has a 450-bed capacity, is also expected to be completed in 2019.
These four projects, especially the two new hospital openings in China, is likely drive revenue growth.
There might be initial teething issues, and high start-up costs, but the long-term impact from these openings will likely be positive for the group’s bottom line.
In its most recent quarter, the group had a mixed performance.
On one hand, the company’s revenue and EBITDA (earnings before interest tax depreciation and amortisation) were up from a year ago, benefiting from the contribution of two newly opened hospitals, and organic growth from its existing hospitals.
On the other hand, the group’s net profit (after tax) for the quarter plunged 40% after excluding one-off gains seen last year. Teething issues, coupled with higher operating, and depreciation cost were the main culprits behind the decline.
However, despite the lower bottom line figures, there are still reasons to be optimistic for the group. Here are three growth drivers that can improve the company’s margins and profit in the future.
Full-year contribution from new hospitals
IHH Healthcare has a vast a network of hospitals, medical centres and clinics, but it has no intention to rest on its laurels. The company is aggressively re-investing its cashflow into new projects, which include the expansion of its existing hospitals and the development of new hospitals.
As mentioned earlier, the group opened two new hospitals in March 2017, namely Gleneagles Hong Kong, and Acibadem Altunizade in Turkey. The former represents its first foray into China. The full year revenue contribution from both hospitals will happen this year.
As the two hospitals mature, their contribution to the bottom line should be more prominent as the hospitals gains traction, and the initial one-off operating expenses fade away.
Organic growth
IHH Healthcare’s portfolio of healthcare facilities are also generating more revenue over time. In its most recent quarter, average revenue per inpatient admission grew at most of its hospitals.
On top of that, inpatient volume also increased in all geographies except for Malaysia. As the population ages and middle class population grows, healthcare expenditure expected to increase over the next few years. The trends could provide a tailwind for the company’s organic growth for many years to come.
The Foolish bottom line
With the opening of new hospitals, there is bound to be short-term teething issues that will eat into margins. Hence, the lower profit we see in IHH’s recent earnings update.
However, investors should focus more on the long-term health of the company.
IHH Healthcare has strong cashflow from its operations, and a healthy balance sheet that should see it through any near-term start-up challenges as it expands its footprint in China. As such, I do believe, that once the new hospitals are fully up and running, the group will likely see healthy margins return together with strong bottom line growth.
IHH Healthcare sees revenue growth from two new China hospitals
https://sbr.com.sg/source/motley-fo...e-sees-revenue-growth-two-new-china-hospitals
It will also expand its hospitals in Malaysia and Turkey.
With a market capitalisation of S$16.6 billion, IHH Healthcare Bhd (SGX:Q0F) is — by far — the largest healthcare stock listed in Singapore. The group operates 49 hospitals and 30 medical centres around the world, including prominent private hospitals in Singapore, namely Gleneagles, Mount Elizabeth and Parkway.
IHH Healthcare has also initiated a few more projects that are due for completion by 2019.
The phase 2 expansion of Pantai Hospital in Kuala Lumpur, and the expansion of Acibadem Maslak in Turkey will increase the bed capacity of the hospitals by 120 beds and 195 beds, respectively. On top of that, the 350-bed Gleneagles Chengdu is slated to be opened this year. Gleaneagles Shanghai, which has a 450-bed capacity, is also expected to be completed in 2019.
These four projects, especially the two new hospital openings in China, is likely drive revenue growth.
There might be initial teething issues, and high start-up costs, but the long-term impact from these openings will likely be positive for the group’s bottom line.
In its most recent quarter, the group had a mixed performance.
On one hand, the company’s revenue and EBITDA (earnings before interest tax depreciation and amortisation) were up from a year ago, benefiting from the contribution of two newly opened hospitals, and organic growth from its existing hospitals.
On the other hand, the group’s net profit (after tax) for the quarter plunged 40% after excluding one-off gains seen last year. Teething issues, coupled with higher operating, and depreciation cost were the main culprits behind the decline.
However, despite the lower bottom line figures, there are still reasons to be optimistic for the group. Here are three growth drivers that can improve the company’s margins and profit in the future.
Full-year contribution from new hospitals
IHH Healthcare has a vast a network of hospitals, medical centres and clinics, but it has no intention to rest on its laurels. The company is aggressively re-investing its cashflow into new projects, which include the expansion of its existing hospitals and the development of new hospitals.
As mentioned earlier, the group opened two new hospitals in March 2017, namely Gleneagles Hong Kong, and Acibadem Altunizade in Turkey. The former represents its first foray into China. The full year revenue contribution from both hospitals will happen this year.
As the two hospitals mature, their contribution to the bottom line should be more prominent as the hospitals gains traction, and the initial one-off operating expenses fade away.
Organic growth
IHH Healthcare’s portfolio of healthcare facilities are also generating more revenue over time. In its most recent quarter, average revenue per inpatient admission grew at most of its hospitals.
On top of that, inpatient volume also increased in all geographies except for Malaysia. As the population ages and middle class population grows, healthcare expenditure expected to increase over the next few years. The trends could provide a tailwind for the company’s organic growth for many years to come.
The Foolish bottom line
With the opening of new hospitals, there is bound to be short-term teething issues that will eat into margins. Hence, the lower profit we see in IHH’s recent earnings update.
However, investors should focus more on the long-term health of the company.
IHH Healthcare has strong cashflow from its operations, and a healthy balance sheet that should see it through any near-term start-up challenges as it expands its footprint in China. As such, I do believe, that once the new hospitals are fully up and running, the group will likely see healthy margins return together with strong bottom line growth.
OngHuatHuat
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IHH just bid for Fortis and indirectly also plan to buy out assets for RHT, very aggressive.
Mergui219067
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IHH share price, like most Malaysia ‘blue chips’ , always get artificially supported by those EPF like Malaysia institutions.
KLSE market has few retail & foreign investors.
KLSE market has few retail & foreign investors.
Mergui219067
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IHH heavy in Turkey ?
Lira becomes lah lah lah ..
Lira becomes lah lah lah ..
Shion
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KPMG struggles to spot regulatory breaches at IHH Healthcare Berhad
KPMG struggles to spot regulatory breaches at IHH Healthcare Berhad
https://sbr.com.sg/healthcare/news/kpmg-struggles-spot-regulatory-breaches-ihh-healthcare-berhad
A previous probe about the firm saw inter-corporate deposits and ties with Fortis’ former major shareholders.
IHH Healthcare Berhad revealed that its company's external auditors, KPMG, have said that they cannot determine if there are any regulatory non-compliances and additional adjustments or disclosures which may be needed for the audit report, as a result of further findings from ongoing investigations at Fortis Healthcare, according to a filing with the Singapore Exchange (SGX).
IHH Healthcare acquired Fortis Healthcare and its subsidiaries in November 2018. Prior to the acquisition, an investigation report by an independent external legal firm was submitted to the former Fortis board, relating to systematic lapse and override of internal controls.
Significant findings, amongst others, highlighted the placement of inter-corporate deposits and existence of possible related parties connected with former controlling shareholders of Fortis. KPMG said these may require "appropriate reassessment" by Fortis Group on the claims from, or transactions with, such parties.
In addition, it revealed that there are ongoing investigations by the Securities and Exchange Board of India (SEBI) and the Serious Fraud Investigation Office, Ministry of Corporate Affairs of India. In October 2018, SEBI issued interim orders which said that certain transactions were structured by some entities which appeared fictitious and fraudulent in nature, resulting in diversion of funds by former controlling shareholders of Fortis.
KPMG said in its independent auditors' report that due to the ongoing process of the various inquiries/investigations, the external auditors of Fortis are unable to determine if there are any regulatory non-compliances and additional adjustments or disclosures which may be necessary as a result of further findings of the ongoing or future regulatory/internal investigations and the consequential impact, if any, on the consolidated financial statements of Fortis.
"Any consequential adjustments may be recorded either as adjustments to the assets acquired, and liabilities assumed in the acquisition which will have an impact on the provisional goodwill recognised by the group on acquisition of Fortis under the purchase price allocation exercise, or as post-acquisition adjustments to be recognised in the financial statements of the group in the period the adjustments are known."
That being said, KPMG highlighted that the accompanying financial statements give a true and fair view of the financial position of the group and of the company as at 31 December 2018, and of their financial performances and their cash flows for the year.
With respect to the findings by the external legal firm, the Fortis Board has implemented specific improvement projects to strengthen the process and control environment, including review and revision of operational and financial authority levels, greater oversight by Fortis Board, review and improve financial reporting processes, more robust secretarial documentation in regard to compliance to regulatory requirements and improving systems design and control enhancement.
According to KPMG’s report, Fortis Board continues to evaluate other areas to strengthen processes and build a robust governance framework, and has initiated an enquiry of the management of certain entities in the Fortis Group that were impacted in respect of the matters investigated by the external legal firm.
Following SEBI’s interim orders, Fortis Group has also taken steps to recover dues from the former controlling shareholders of Fortis and various other entities. These include initiating civil actions against the entities demanding recovery of the outstanding amounts together with interest and to secure repayment of the outstanding amounts on the assets of these entities.
KPMG struggles to spot regulatory breaches at IHH Healthcare Berhad
https://sbr.com.sg/healthcare/news/kpmg-struggles-spot-regulatory-breaches-ihh-healthcare-berhad
A previous probe about the firm saw inter-corporate deposits and ties with Fortis’ former major shareholders.
IHH Healthcare Berhad revealed that its company's external auditors, KPMG, have said that they cannot determine if there are any regulatory non-compliances and additional adjustments or disclosures which may be needed for the audit report, as a result of further findings from ongoing investigations at Fortis Healthcare, according to a filing with the Singapore Exchange (SGX).
IHH Healthcare acquired Fortis Healthcare and its subsidiaries in November 2018. Prior to the acquisition, an investigation report by an independent external legal firm was submitted to the former Fortis board, relating to systematic lapse and override of internal controls.
Significant findings, amongst others, highlighted the placement of inter-corporate deposits and existence of possible related parties connected with former controlling shareholders of Fortis. KPMG said these may require "appropriate reassessment" by Fortis Group on the claims from, or transactions with, such parties.
In addition, it revealed that there are ongoing investigations by the Securities and Exchange Board of India (SEBI) and the Serious Fraud Investigation Office, Ministry of Corporate Affairs of India. In October 2018, SEBI issued interim orders which said that certain transactions were structured by some entities which appeared fictitious and fraudulent in nature, resulting in diversion of funds by former controlling shareholders of Fortis.
KPMG said in its independent auditors' report that due to the ongoing process of the various inquiries/investigations, the external auditors of Fortis are unable to determine if there are any regulatory non-compliances and additional adjustments or disclosures which may be necessary as a result of further findings of the ongoing or future regulatory/internal investigations and the consequential impact, if any, on the consolidated financial statements of Fortis.
"Any consequential adjustments may be recorded either as adjustments to the assets acquired, and liabilities assumed in the acquisition which will have an impact on the provisional goodwill recognised by the group on acquisition of Fortis under the purchase price allocation exercise, or as post-acquisition adjustments to be recognised in the financial statements of the group in the period the adjustments are known."
That being said, KPMG highlighted that the accompanying financial statements give a true and fair view of the financial position of the group and of the company as at 31 December 2018, and of their financial performances and their cash flows for the year.
With respect to the findings by the external legal firm, the Fortis Board has implemented specific improvement projects to strengthen the process and control environment, including review and revision of operational and financial authority levels, greater oversight by Fortis Board, review and improve financial reporting processes, more robust secretarial documentation in regard to compliance to regulatory requirements and improving systems design and control enhancement.
According to KPMG’s report, Fortis Board continues to evaluate other areas to strengthen processes and build a robust governance framework, and has initiated an enquiry of the management of certain entities in the Fortis Group that were impacted in respect of the matters investigated by the external legal firm.
Following SEBI’s interim orders, Fortis Group has also taken steps to recover dues from the former controlling shareholders of Fortis and various other entities. These include initiating civil actions against the entities demanding recovery of the outstanding amounts together with interest and to secure repayment of the outstanding amounts on the assets of these entities.
Shion
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IHH Healthcare auditor issues qualified opinion
IHH Healthcare auditor issues qualified opinion
https://www.straitstimes.com/busine...healthcare-auditor-issues-qualified-opinion-0
SINGAPORE (THE BUSINESS TIMES) - The external auditor for IHH Healthcare has issued a qualified opinion as ongoing probes relating to the Fortis Healthcare acquisition may have an impact on adjustments to be recorded in IHH's financial statements.
KPMG said that except for the Fortis deal, IHH's latest full-year financial statements give a "true and fair" view of the financial position of the group as at Dec 31, 2019.
There was a similar qualified opinion in IHH's 2018 audited financial statements, said the Kuala Lumpur-based hospital operator.
IHH completed the acquisition of Indian hospital chain Fortis Healthcare and its units on Nov 13, 2018.
Before the deal, an investigation by an independent legal firm for the former Fortis board indicated systematic lapses and/or override of internal controls.
The Fortis group had also initiated enquiries of the management of entities within the group.
There are also investigations by the Securities and Exchange Board of India and the Serious Fraud Investigation Office under India's Corporate Affairs Ministry.
Due to the ongoing inquiries - including the need for any additional investigations by Fortis - Fortis's external auditors are unable to determine if there are any regulatory non-compliances and if any additional adjustments or disclosures may be required as a result of further findings of the investigations.
IHH posted a 15 per cent drop in net profit excluding exceptional items for the fourth quarter last year, as new loans were taken for the Fortis acquisition and for working capital while a unit's euro bank loans and interest were swapped into the appreciating Turkish lira.
IHH shares closed 4.14 per cent higher at $1.76 yesterday.
IHH Healthcare auditor issues qualified opinion
https://www.straitstimes.com/busine...healthcare-auditor-issues-qualified-opinion-0
SINGAPORE (THE BUSINESS TIMES) - The external auditor for IHH Healthcare has issued a qualified opinion as ongoing probes relating to the Fortis Healthcare acquisition may have an impact on adjustments to be recorded in IHH's financial statements.
KPMG said that except for the Fortis deal, IHH's latest full-year financial statements give a "true and fair" view of the financial position of the group as at Dec 31, 2019.
There was a similar qualified opinion in IHH's 2018 audited financial statements, said the Kuala Lumpur-based hospital operator.
IHH completed the acquisition of Indian hospital chain Fortis Healthcare and its units on Nov 13, 2018.
Before the deal, an investigation by an independent legal firm for the former Fortis board indicated systematic lapses and/or override of internal controls.
The Fortis group had also initiated enquiries of the management of entities within the group.
There are also investigations by the Securities and Exchange Board of India and the Serious Fraud Investigation Office under India's Corporate Affairs Ministry.
Due to the ongoing inquiries - including the need for any additional investigations by Fortis - Fortis's external auditors are unable to determine if there are any regulatory non-compliances and if any additional adjustments or disclosures may be required as a result of further findings of the investigations.
IHH posted a 15 per cent drop in net profit excluding exceptional items for the fourth quarter last year, as new loans were taken for the Fortis acquisition and for working capital while a unit's euro bank loans and interest were swapped into the appreciating Turkish lira.
IHH shares closed 4.14 per cent higher at $1.76 yesterday.
Shion
Senior Mentor
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- Oct 24, 2008
- Messages
- 359,547
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- 109,710
IHH Healthcare rolls out telemedicine services
IHH Healthcare rolls out telemedicine services
https://sbr.com.sg/healthcare/more-news/ihh-healthcare-rolls-out-telemedicine-services
The expansion aims to meet the evolving needs of patients.
IHH Healthcare has made virtual consultation services available across all its key markets Malaysia, Singapore, Turkey, India and Hong Kong, according to an announcement.
The set of services include online consultation to doorstep drug delivery, along with the option for a transfer to the group’s facilities, if necessary.
Patients can book virtual consultations with doctors from all 15 Pantai and Gleneagles hospitals in Malaysia, Parkway Shenton clinics in Singapore, 21 Acibadem hospitals in Turkey, Bulgaria, Macedonia and Netherlands, Gleneagles hospital in Hong Kong, as well as 23 Fortis hospitals, 5 Gleneagles Global hospitals and Continental Hospital in India.
Earlier this March, IHH invested in regional telehealth platform Doctor Anywhere and in Lucence Diagnostics, which offers blood-based screening and treatment monitoring solutions for oncology patients.
IHH Healthcare rolls out telemedicine services
https://sbr.com.sg/healthcare/more-news/ihh-healthcare-rolls-out-telemedicine-services
The expansion aims to meet the evolving needs of patients.
IHH Healthcare has made virtual consultation services available across all its key markets Malaysia, Singapore, Turkey, India and Hong Kong, according to an announcement.
The set of services include online consultation to doorstep drug delivery, along with the option for a transfer to the group’s facilities, if necessary.
Patients can book virtual consultations with doctors from all 15 Pantai and Gleneagles hospitals in Malaysia, Parkway Shenton clinics in Singapore, 21 Acibadem hospitals in Turkey, Bulgaria, Macedonia and Netherlands, Gleneagles hospital in Hong Kong, as well as 23 Fortis hospitals, 5 Gleneagles Global hospitals and Continental Hospital in India.
Earlier this March, IHH invested in regional telehealth platform Doctor Anywhere and in Lucence Diagnostics, which offers blood-based screening and treatment monitoring solutions for oncology patients.
Shion
Senior Mentor
- Joined
- Oct 24, 2008
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- 359,547
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- 109,710
IHH Healthcare completes acquisition of Prince Court Medical Centre for RM1.02b
IHH Healthcare completes acquisition of Prince Court Medical Centre for RM1.02b
https://www.businesstimes.com.sg/co...ion-of-prince-court-medical-centre-for-rm102b
HOSPITAL operator IHH Healthcare has completed its purchase of Prince Court Medical Centre for RM1.02 billion (S$330 million), almost a year after it first announced the proposed acquisition last September.
This is the group's 16th hospital in Malaysia, where it already operates four Gleneagles hospitals and 11 Pantai hospitals, IHH announced on Tuesday.
Prince Court Medical Centre is a 277 single-bed private healthcare facility located in Kuala Lumpur.
The seller is a wholly-owned subsidiary of Malaysian sovereign wealth fund Khazanah Nasional.
The deal is deemed a related party transaction as Khazanah is a major shareholder of IHH, with a 26.04 per cent indirect interest in IHH as at Aug 23, 2019.
Said Jean-Francois Naa, IHH's chief executive officer of its Malaysia operations division: "Prince Court Medical Centre will complement IHH's cluster strategy of having specialised tertiary hospitals in Kuala Lumpur. There are currently three Pantai Hospitals and one Gleneagles Hospital serving the needs of the community in the city.
"We can effectively leverage our combined clinical excellence and expertise to deliver optimised, comprehensive care to both our local and foreign patients."
Mr Naa added that clinical services at Prince Court Medical Centre will run as usual and patients can continue with their existing care at the hospital.
IHH also said it will look into investing in Prince Court Medical Centre to "enhance the patient experience".
Within Malaysia, IHH has more than 2,900 licensed beds, over 11,000 staff and over 1,000 resident and sessional consultants.
Globally, the group employs over 55,000 people and operates over 15,000 licensed beds across 77 hospitals in 10 countries.
As at 11.46am on Wednesday, IHH shares were trading at S$1.73, down S$0.01 or 0.6 per cent.
IHH Healthcare completes acquisition of Prince Court Medical Centre for RM1.02b
https://www.businesstimes.com.sg/co...ion-of-prince-court-medical-centre-for-rm102b
HOSPITAL operator IHH Healthcare has completed its purchase of Prince Court Medical Centre for RM1.02 billion (S$330 million), almost a year after it first announced the proposed acquisition last September.
This is the group's 16th hospital in Malaysia, where it already operates four Gleneagles hospitals and 11 Pantai hospitals, IHH announced on Tuesday.
Prince Court Medical Centre is a 277 single-bed private healthcare facility located in Kuala Lumpur.
The seller is a wholly-owned subsidiary of Malaysian sovereign wealth fund Khazanah Nasional.
The deal is deemed a related party transaction as Khazanah is a major shareholder of IHH, with a 26.04 per cent indirect interest in IHH as at Aug 23, 2019.
Said Jean-Francois Naa, IHH's chief executive officer of its Malaysia operations division: "Prince Court Medical Centre will complement IHH's cluster strategy of having specialised tertiary hospitals in Kuala Lumpur. There are currently three Pantai Hospitals and one Gleneagles Hospital serving the needs of the community in the city.
"We can effectively leverage our combined clinical excellence and expertise to deliver optimised, comprehensive care to both our local and foreign patients."
Mr Naa added that clinical services at Prince Court Medical Centre will run as usual and patients can continue with their existing care at the hospital.
IHH also said it will look into investing in Prince Court Medical Centre to "enhance the patient experience".
Within Malaysia, IHH has more than 2,900 licensed beds, over 11,000 staff and over 1,000 resident and sessional consultants.
Globally, the group employs over 55,000 people and operates over 15,000 licensed beds across 77 hospitals in 10 countries.
As at 11.46am on Wednesday, IHH shares were trading at S$1.73, down S$0.01 or 0.6 per cent.
Shion
Senior Mentor
- Joined
- Oct 24, 2008
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- 359,547
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- 109,710
'Better quarters ahead' for IHH Healthcare: CGS-CIMB
'Better quarters ahead' for IHH Healthcare: CGS-CIMB
https://www.theedgesingapore.com/capital/brokers-calls/better-quarters-ahead-ihh-healthcare-cgs-cimb
CGS-CIMB analyst Ngoh Yi Sin has maintained her “add” rating on IHH Healthcare, but with a lower target price of RM6.10 ($2.00) and lower earnings per share (EPS) forecast.
Ngoh has cut her EPS forecast for FY20-22 by 7.3-25.2% to reflect lower patient footfall and the slower return of foreign patients.
Ngoh noted that IHH Healthcare sank into core profit after tax and minority interests (PATMI) loss of RM84.2 million in 2Q20 compared to RM240.1 million core PATMI in 2Q19.
2Q20 topline fell 30% y-o-y on the back of movement controls, travel restrictions and postponement of elective procedures, which led to lower inpatient volumes across IHH’s various markets.
IHH’s Singapore’s market was least impacted due to government support, which is expected to taper off from 3Q20, while India saw the worst margin decline due to negligible foreign patient revenue and the highest drop in inpatient admissions.
However, Ngoh expects the company to recover, as IHH saw a rebound in local patient volumes and resumption of elective surgeries as countries reopened in June.
Occupancies across the network also recovered to 40-60% (vs. pre- Covid level of 65-70%), which underpinned its profit turnaround. Ngoh expects such positive momentum to sustain into 2H20.
Furthermore, the group has taken various mitigating measures, including diversifying its service offerings into telemedicine, treatment of Covid-19 patients and diagnostic testing, which contributed 8-15% of 2Q20 revenue.
The group has also undertaken cost and capital controls, including deferring 30% of its annual capital expenditure (capex) to after 2020, managing interest costs and FX exposure, and tapping on local government aid.
As at 9.58 am, shares of IHH Healthcare were trading flat at $1.75, with a price-to-book ratio of 1.91 and dividend yield of 0.44%
'Better quarters ahead' for IHH Healthcare: CGS-CIMB
https://www.theedgesingapore.com/capital/brokers-calls/better-quarters-ahead-ihh-healthcare-cgs-cimb
CGS-CIMB analyst Ngoh Yi Sin has maintained her “add” rating on IHH Healthcare, but with a lower target price of RM6.10 ($2.00) and lower earnings per share (EPS) forecast.
Ngoh has cut her EPS forecast for FY20-22 by 7.3-25.2% to reflect lower patient footfall and the slower return of foreign patients.
Ngoh noted that IHH Healthcare sank into core profit after tax and minority interests (PATMI) loss of RM84.2 million in 2Q20 compared to RM240.1 million core PATMI in 2Q19.
2Q20 topline fell 30% y-o-y on the back of movement controls, travel restrictions and postponement of elective procedures, which led to lower inpatient volumes across IHH’s various markets.
IHH’s Singapore’s market was least impacted due to government support, which is expected to taper off from 3Q20, while India saw the worst margin decline due to negligible foreign patient revenue and the highest drop in inpatient admissions.
However, Ngoh expects the company to recover, as IHH saw a rebound in local patient volumes and resumption of elective surgeries as countries reopened in June.
Occupancies across the network also recovered to 40-60% (vs. pre- Covid level of 65-70%), which underpinned its profit turnaround. Ngoh expects such positive momentum to sustain into 2H20.
Furthermore, the group has taken various mitigating measures, including diversifying its service offerings into telemedicine, treatment of Covid-19 patients and diagnostic testing, which contributed 8-15% of 2Q20 revenue.
The group has also undertaken cost and capital controls, including deferring 30% of its annual capital expenditure (capex) to after 2020, managing interest costs and FX exposure, and tapping on local government aid.
As at 9.58 am, shares of IHH Healthcare were trading flat at $1.75, with a price-to-book ratio of 1.91 and dividend yield of 0.44%
Shion
Senior Mentor
- Joined
- Oct 24, 2008
- Messages
- 359,547
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- 109,710
IHH Healthcare reverses into the black with 3Q earnings of RM310.0 mil, reports 'firm recovery' for
IHH Healthcare reverses into the black with 3Q earnings of RM310.0 mil, reports 'firm recovery' for the quarter
https://www.theedgesingapore.com/ca...ings-rm3100-mil-reports-firm-recovery-quarter
IHH Healthcare has posted earnings of RM310.0 million ($101.7 million) for the 3QFY2020 ended September, reversing from its net loss of RM120.6 million in 2QFY2020.
This translates to basic earnings per share (EPS) of 3.28 sen for the quarter, compared to EPS of 2.44 sen a year ago.
Y-o-y, the group, which counts Singapore-based Parkway Pantai and Gleneagles Hospital under its portfolio, registered a 31.1% growth, from the earnings of RM236.3 million in 3QFY2019.
The growth, according to the group, was attributable to the operational recovery and realisation of a one-off foreign currency translation reserve of RM193.5 million upon the substantive liquidation of IHH (Bharat).
3QFY2020 revenue fell 7% y-o-y to RM3.5 billion as local patients, including elective cases, returned “in strength” despite international travel restrictions.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) remained relatively flat at RM832.7 million despite the lower revenue due to tight cost control as well as government grants and reliefs.
9MFY2020 revenue and EBITDA declined 13% and 24% y-o-y respectively due to the impact of Covid-19 primarily seen in 2QFY2020’s figures.
For the 9MFY2020, the group registered a net loss of RM130.5 million compared to earnings of RM510.8 million in the year before.
IHH says it has seen a recovery in occupancy in its home markets to between 50% and 65% in 3QFY2020, which stands at about 70% to 90% of its pre-Covid-19 levels.
The group says it will continue to create new revenue streams through new service offerings, as well as apply strict cost controls and cash and forex management.
Looking ahead, the group remains optimistic of a progressive recovery. It adds that it is encouraged that patient recovery have recovered strongly since June.
In the short term, however, it expects to see continued impact from the Covid-19 pandemic, especially if there are continued disruptions from subsequent outbreaks and fresh lockdowns.
It adds that it remains in a “strong financial position with ample liquidity and cash flow, even post-acquisition of PCMC” and is “well-prepared” to ride out the pandemic.
In Malaysia, revenue fell 4% y-o-y but grew 33% q-o-q to RM578.9 million amid the return of local patients.
In Singapore, revenue fell 8% y-o-y but climbed 24% q-o-q to RM1.0 billion thanks to the return of local patients since the lifting of the circuit breaker measures in June 2020.
Its operations in Turkey and Central and Eastern Europe saw marginal improvement in its revenue of RM922.7 million, up 1% y-o-y and up 50% q-o-q. The higher numbers were due to the return of its domestic and foreign patients.
In India, revenue fell 21% y-o-y but grew 67% q-o-q to RM694.4 million on the return of local patients and the treating of Covid-19 patients.
IMU Health’s revenue fell 16% y-o-y to RM54.0 million mainly due to the changes in its academic calendar owing to Covid-19 disruptions.
Parkway Life REIT’s external revenue grew 10% y-o-y to RM38.9 million due to rent contribution from properties acquired in 4QFY2019.
Shares in IHH closed flat at $1.82 on Nov 26.
IHH Healthcare reverses into the black with 3Q earnings of RM310.0 mil, reports 'firm recovery' for the quarter
https://www.theedgesingapore.com/ca...ings-rm3100-mil-reports-firm-recovery-quarter
IHH Healthcare has posted earnings of RM310.0 million ($101.7 million) for the 3QFY2020 ended September, reversing from its net loss of RM120.6 million in 2QFY2020.
This translates to basic earnings per share (EPS) of 3.28 sen for the quarter, compared to EPS of 2.44 sen a year ago.
Y-o-y, the group, which counts Singapore-based Parkway Pantai and Gleneagles Hospital under its portfolio, registered a 31.1% growth, from the earnings of RM236.3 million in 3QFY2019.
The growth, according to the group, was attributable to the operational recovery and realisation of a one-off foreign currency translation reserve of RM193.5 million upon the substantive liquidation of IHH (Bharat).
3QFY2020 revenue fell 7% y-o-y to RM3.5 billion as local patients, including elective cases, returned “in strength” despite international travel restrictions.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) remained relatively flat at RM832.7 million despite the lower revenue due to tight cost control as well as government grants and reliefs.
9MFY2020 revenue and EBITDA declined 13% and 24% y-o-y respectively due to the impact of Covid-19 primarily seen in 2QFY2020’s figures.
For the 9MFY2020, the group registered a net loss of RM130.5 million compared to earnings of RM510.8 million in the year before.
IHH says it has seen a recovery in occupancy in its home markets to between 50% and 65% in 3QFY2020, which stands at about 70% to 90% of its pre-Covid-19 levels.
The group says it will continue to create new revenue streams through new service offerings, as well as apply strict cost controls and cash and forex management.
Looking ahead, the group remains optimistic of a progressive recovery. It adds that it is encouraged that patient recovery have recovered strongly since June.
In the short term, however, it expects to see continued impact from the Covid-19 pandemic, especially if there are continued disruptions from subsequent outbreaks and fresh lockdowns.
It adds that it remains in a “strong financial position with ample liquidity and cash flow, even post-acquisition of PCMC” and is “well-prepared” to ride out the pandemic.
In Malaysia, revenue fell 4% y-o-y but grew 33% q-o-q to RM578.9 million amid the return of local patients.
In Singapore, revenue fell 8% y-o-y but climbed 24% q-o-q to RM1.0 billion thanks to the return of local patients since the lifting of the circuit breaker measures in June 2020.
Its operations in Turkey and Central and Eastern Europe saw marginal improvement in its revenue of RM922.7 million, up 1% y-o-y and up 50% q-o-q. The higher numbers were due to the return of its domestic and foreign patients.
In India, revenue fell 21% y-o-y but grew 67% q-o-q to RM694.4 million on the return of local patients and the treating of Covid-19 patients.
IMU Health’s revenue fell 16% y-o-y to RM54.0 million mainly due to the changes in its academic calendar owing to Covid-19 disruptions.
Parkway Life REIT’s external revenue grew 10% y-o-y to RM38.9 million due to rent contribution from properties acquired in 4QFY2019.
Shares in IHH closed flat at $1.82 on Nov 26.
Shion
Senior Mentor
- Joined
- Oct 24, 2008
- Messages
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- 109,710
IHH Healthcare reports 500% jump in second-quarter earnings due to Covid-19 efforts
https://www.straitstimes.com/busine...-jump-in-second-quarter-earnings-due-to-covid
SINGAPORE - Earnings rocketed 500 per cent at IHH Healthcare in the second quarter on the back of Covid-19-related efforts in Singapore and Malaysia.
Net profit came in at RM483.3 million ($155.8 million) for the three months to Jun 30 while revenue jumped 66 per cent to RM4.3 billion, it reported on Thursday (Aug 26).
IHH is the latest medical firm to reap benefits from the pandemic. Raffles Medical, Healthway Medical and Q&M Dental all recently reported improved revenue from the provision of Covid-19 vaccination, laboratory and diagnostic services.
IHH Healthcare managing director and chief executive Kelvin Loh said the company's performance "rebounded beyond pre-Covid levels" with more patients returning to its hospitals and the provision of services related to Covid-19.
He added that costs came under better control after Gleneagles Hong Kong Hospital broke even in May. Disposal gains from Apollo Gleneagles Hospitals in Kolkata, India, also helped to offset a substantive write down of Parkway Yangon Hospital in Myanmar and Gleneagles Chengdu Hospital in China.
The bulk of the company's second-quarter turnover came from its Singapore operations. Revenue improved 57 per cent to RM1.3 billion, buoyed by higher inpatient admissions at its Mount Elizabeth, Gleneagles and Parkway hospitals.
IHH Singapore also ramped up its lab and diagnostic capabilities to support the Government's Covid-19 efforts. It now operates four vaccination centres via its primary care arm Parkway Shenton.
IHH Healthcare shares closed up 1.08 per cent at $1.88 yesterday. The company is also listed in Malaysia.
Earlier this month, Q&M Dental and Healthway Medical reported results from supporting Singapore's Covid-19 testing efforts.
Q&M obtained a licence to open its Covid-19 medical laboratory last September while Healthway Medical was commissioned by the Government to operate four vaccination centres.
Raffles Medical has expanded its operations beyond air-border screening and pre-event testing to include vaccination centres, pre-departure swabbing of cruise passengers, as well as operating dedicated polymerase chain reaction testing centres.
The moves helped to boost the company's earnings and propelled executive chairman Loo Choon Yong onto the Bloomberg Billionaires Index.
Shion
Senior Mentor
- Joined
- Oct 24, 2008
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'Buy' IHH Healthcare as it enters next growth phase
https://www.theedgesingapore.com/ca...uy-ihh-healthcare-it-enters-next-growth-phase
Analysts from CGS-CIMB Research, DBS Group Research and UOB Kay Hian are positive on IHH Healthcare’s results, as it reverses out of the red for the 1HFY2021 ended June.
On Aug 26, the healthcare group reported earnings of RM858.9 million ($277.1 million) for the half-year period, compared to its RM440.4 million loss in the 1HFY2020.
CGS-CIMB analysts Eing Kar Mei and Tay Wee Kuang have kept their “add” recommendation on IHH Healthcare with an unchanged target price of RM6.91.
The analysts have also kept their earnings per share (EPS) estimates unchanged for the FY2021 to FY2022 unchanged pending the company’s briefing.
That said, the counter is now trading at an “attractive valuation” of more than 1 standard deviation (s.d.) below its five-year historical mean.
“We continue to like IHH for its diversified geographical reach,” write Eing and Tay in an Aug 27 report.
“While revenue came in largely in line at 54% of our full-year forecast, we underestimated the EBITDA for India and Singapore as well as overestimated its net finance cost,” they add.
Although medical tourism has been curtailed and remains so in most places due to the Covid-19 pandemic, Eing and Tay expect patient volume to recover gradually on the back of growing Covid-19 vaccination rates.
“Greater China remained the only market to report an EBITDA loss in 1HFY2021 but the losses narrowed from RM116 million in 1HFY2020 to just RM14 million in 1HFY2021. Gleneagles Hong Kong achieved EBITDA breakeven in May; we see continuous EBITDA growth ahead as operating efficiency increases,” they write.
A re-rating catalyst for the stock is stronger-than-expected inpatient volumes and revenue intensity.
Meanwhile, the converse is true, for downside risks to the counter.
DBS analyst Rachel Tan has, too, kept “buy” on IHH Healthcare.
At present, the counter is trading at a “very attractive” FY2022 EV/EBITDA of 14 times, close to -2 s.d. of its historical range.
“[IHH] is positioned to ride on the strong pent-up demand from foreign patients when borders reopen,” says Tan.
Furthermore, IHH, with strong platforms in India and China, now has exposure to Asia’s two largest economies. India and China also have the highest growth potential in the healthcare sector, she adds.
As such, Tan has raised her target price to RM7.20, or $2.32 from RM6.15 or $2 previously.
Tan has also upped her forecasts for FY2021 to FY2022 by 45% to 55% based on sum-of-the-parts (SOTP) valuation methodology by geography.
“We applied EV/EBITDA multiples ranging from 10-20 times based on its various geographical markets,” she writes.
To Tan, IHH’s medium-term outlook is bright as it rides out near-term headwinds and gestation periods for the new hospitals. Its exposure to the Indian and Chinese markets would further elevate its long-term prospects, she says.
However, new waves of Covid-19 infections, a slowdown in the global economy, weaker-than-expected performances especially in new markets, as well as changes in government policies could be downside risks for IHH.
Finally, UOB Kay Hian analyst Phillip Wong has maintained “buy” with a higher target price of RM6.40 from RM5.70 previously.
“Our SOTP-based target price implies 42.6 times FY2022 P/E, below its historical 5-year, 12-month forward P/E of 46 times,” he writes in an Aug 27 report.
He has also raised his earnings estimates for the group by 20%, 9% and 6% for the FY2021, FY2022 and FY2023 respectively. The higher estimates include higher inpatient admissions and better margins.
According to his estimates, IHH’s core profit for the 2QFY2021 “well exceeded expectations” for both the brokerage and consensus.
To be sure, IHH’s core profit of RM463.6 million stood at 80% of UOB Kay Hian’s FY2021 estimates, and 73% of consensus’ full-year estimates.
“Non-COVID-19 patient admission was surprisingly robust while GHK achieved operational breakeven. While pandemic-related contributions are expected to normalise, this is balanced by turnaround in GHK and Acibadem’s operations have been de-risked significantly,” he writes.
Like his fellow analysts, Wong deems IHH’s valuations as attractive with “resilient yet defensive” three-year earnings compound annual growth rate of 25.6% from FY2020 to FY2023. IHH’s sound track record is also a contributor to Wong’s positive sentiment on the counter.
“Earnings drag arising from its North Asia operations have been addressed while Acibadem’s operations are being increasingly de-risked with an increasing foreign patient mix. The diminished risks and attractive valuations far exceed the uncertainty revolving around Fortis and IHH’s initial 31% stake that has been brought into question,” he says.
That said, key downside risks, to Wong, are execution risk, a shortfall in turning around Fortis and heightened regulatory hurdles.
As at 4.11pm, shares in IHH are trading 5 cents lower or 2.45% down at $1.99 on the SGX, or RM6.40 on Bursa Malaysia. According to DBS’s estimates, IHH is trading at an FY2021 P/B of 2.2 times with a dividend yield of 0.7%.
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