Kenanga: IHH on consolidation drive

Kenanga Research expects IHH Healthcare Bhd's growth driver for the next five years would come from the consolidation of its business and expansion of its facilities in Singapore, Malaysia and Turkey.

Kenanga Research in a research note today said the healthcare giant is expected to complete the second phase of the Mount Elizabeth Novena Hospital which will increase the bed capacity to 333 from 150 currently.

The research house said in Malaysia, IHH's subsidiary, Parkway Pantai Ltd, is undertaking expansion projects in four hospitals -- Gleneagles Medical Centre Penang, Pantai Hospital and Gleneagles Kuala Lumpur, and Pantai Hospital Klang.

"Greenfield projects, namely Gleneagles Kota Kinabalu, Pantai Hospital Manjung and Gleneagles Medini will add an estimated 500 beds to its network by next year," it said.

In Turkey, it said, IHH's subsidiary in the country, Acibadem Holdings, is undertaking expansion projects in two hospitals, Acibadem Sistina Skopje Clinical Hospital and Acibadem Maslak Hospital.

The company is also undertaking two greenfield development projects at Acibadem Ankara and Bodrum Hospital, it said.

However, the potential risk to IHH's growth would be the slower-than-expected commercial operation of greenfield and brownfield projects.

Meanwhile, Alliance Research in a separate note said despite optimism on the company's earnings prospects, the commendable share price performance (up 21.8 per cent since its initial public offering) has fully priced in its strong earnings momentum going forward.

Kenanga Research is maintaining "Market Perform" valuation and a target price of RM3.51 on IHH while Alliance Research retains its "Sell" recommendation on the healthcare giant with a target price of RM2.86.-- Bernama