RHB Research has maintained a “Buy” recommendation for IHH Healthcare at an SOP-derived TP Of RM7.35, 17% upside with c.1% FY22F yield.
It said that post-results, it maintains its forecasts as it awaiting further clarity from IHH’s upcoming analyst briefing.
RHB said that this counter is still trading at an undemanding 13x FY22F EV/EBITDA (-1SD of its 5-year mean). We ascribed an 0% ESG discount/premium to our intrinsic, as its ESG score is in line with the country median.
The research house said that IHH Healthcare’s FY21 earnings are above expectations, due to the better-than-expected performance from the Singapore segment, while its other markets remain resilient.
It said that its recovery trajectory remains on track, further complemented by its appetite to acquire strategic assets and to develop its high-margin diagnostics business. We make no changes to our forecasts, pending further clarity from its impending results briefing.
The research house said that operationally, revenue intensity dropped by 9% QoQ, which was more than offset by the growth in inpatient admissions (+18% QoQ) post lifting of the MCO. This led to a healthy 11% growth in EBITDA. We continue to expect the pace of recovery to pick up in the subsequent quarters.
