Research house Maybank IB has introduced an expanded ESG tear sheet for IHH, assigning a slightly below-average score of 48 (out of 100). Maybank IB said the group has an established sustainability framework and internal policies, as well as a few tangible mid/long-term sustainability targets. However, it has just begun disclosing proper ESG metrics in FY22, and thus is still at the nascent stage of its sustainability journey.
Still at the nascent stage
The group identified four main pillars – patients, people, public, and planet that shape its sustainability commitments and align with 8 UNSDGs. Quality service care and nurturing a healthier society sit higher in its materiality matrix, followed by the pursuit of a lower carbon footprint. Maybank IB’s below-average ESG scoring is consistent with Sustainalytics which assigned an ESG score of 34.8 (latest review in Apr 2023), putting IHH in the ‘High’ risk rating category.
Setting 2022 as baseline
Overall, the group has set 2022 as the baseline for most of its sustainability targets. The group has begun tracking key metrics to measure its quality of care and patient stewardship, besides ongoing enhancement on its digitalization journey. It is also pushing for better diversity, inclusion, and target development across its organisation as part of promoting a healthier
workplace culture. On environmental-related targets, IHH aims to meet TCFD disclosure standards by 2025. Consistent disclosures are needed to make historical comparison meaningful.
Gradual improvement seen for FY23E
FY21 was a COVID bumper year, while FY22 was a transitory year that would have seen stronger performance if not because of the hyperinflationary adjustments on its Turkey ops. Growth in FY23E however could hinge upon its Singapore ops returning to pre-pandemic levels, and the rest of the markets sustaining decent BORs, besides ongoing cost optimisation exercises. The house is revising FY23/24E net profit forecasts by -11/- 13% upon updating FY22 AR numbers and lowering its margin assumption to reflect cost escalations.
