01/03/2024 03:05 PM

KUALA LUMPUR, March 1 (Bernama) -- Public Investment Bank Bhd remains optimistic on IHH Healthcare Bhd’s operational landscape as the group continues to grow its ambulatory care business and taking the initiative in evaluating value-accretive assets which provide opportunities to penetrate new or existing markets this year. 

The research house said in a note today that IHH has enhanced its dividend policy to no less than 30 per cent from 20 per cent of the group’s profit after tax and minority interests (excluding exceptional items) going forward.

“We are also positive on IHH’s expansion plans to increase its bed capacity by 33 per cent (about 4,000 new beds) across Malaysia, India, Hong Kong, Türkiye and Europe within the next five years.

“This proactive approach positions the group to sustain competitiveness and adaptability in the continually evolving healthcare landscape," it said. 

Therefore, Public Investment Bank raised FY2024-2025 earnings forecast by 7.4-7.7 per cent to factor in higher inpatient volume, and reiterate an 'outperform' rating on IHH with a higher target price (TP) of RM7.65 per share. 

Meanwhile, RHB Investment Bank Bhd also remains positive on IHH’s long-term prospects as the research house likes the group’s solid execution strategy and reputable regional footprint across key regions – driven by its strong brand awareness, inelastic demand nature towards healthcare services, and focus on affluent clientele, which should provide earnings resiliency despite the challenging market environment.

"Post 2023’s year-end book-keeping, our 2024-2025 earnings are raised by 2 per cent and 1 per cent.

"We maintain a 'buy' call with a higher TP of RM7.50 per share," it said. 

At 12.30 pm, the IHH counter was flat at RM6.15 with 2.0 million shares traded on Bursa Malaysia. 


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