A leader in premium healthcare
IHH Healthcare Berhad (IHH) is an integrated healthcare services provider with market-leading positions in Singapore, Malaysia and Turkey. IHH offers a full spectrum of healthcare services, ranging from primary healthcare clinics to secondary and tertiary hospitals, to quaternary care and post-operative rehabilitation centres. The group’s core businesses are operated through three key subsidiaries, namely Parkway Pantai Limited (PPL), Acibadem Holding and IMU.
Strategic expansion and developed laboratory business to drive growth
We believe that the expansion of IHH’s clusters will allow the group to improve operational efficiencies and also lead to cost saving in overhead operations. As for laboratory business, we think that IHH digital transformation journey by ramping up its laboratory capabilities will lead to seamless offline to online healthcare ecosystem.
Anticipate IHH to maintain more than 20% dividend payout ratio.
Historically, we learnt that the company has been paying more than its dividend policy of 20% of net profits and this is expected to continue in the foreseeable future. Few factors are the guiding principles by the board in considering dividend payments, namely (i) the amount of cash and cash equivalents, (ii) return on equity and retained earnings and (iii) projected levels of capital expenditure and other investments. Assuming a 32% dividend payout ratio, we expect IHH to declare 6.6 sen/7.1 sen dividend per share for 2023E/2024F respectively, translating into a decent 1.0%-1.2% yield at current price level.
Re-initiate with a ‘BUY’ call and TP of RM7.18
We re-initiate coverage on IHH with a BUY call and TP of RM7.18. Our valuation is derived based on sum-of-part (SOP) valuation with a WACC of 7% for Parkway Pantai Limited, 11% for Acibadem and a long-term growth of 2%.
Source: BIMB Securities Research - 2 Mar 2023
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Created by kltrader | Aug 12, 2024
Created by kltrader | Aug 12, 2024
Created by kltrader | Aug 09, 2024
Created by kltrader | Aug 09, 2024