Starbiz  has  reported  that  IHH  Healthcare  is  believed  to  be  looking  into acquiring an 11.5% associate stake in BDMS, which is the largest hospital operator listed in Thailand. Based on the latest closing price of 17.20 baht per share, the stake is valued at 30.46b baht (RM 3.27bn). It is understood that  the  acquisition  will  be  funded  internally  and  externally,  of  which  the amount will be decided at a later date. (Source: The Star)

Comment:  We  view  the  rumoured  acquisition  positively  as  it  is  consistent with IHH’s continuous expansion plans which includes acquiring associate stakes  in  markets  which  it  does  not  have  a  presence.  This  move  to  gain entry into Thailand would be beneficial as IHH continue to Thailand remains a key player in healthcare industry especially in healthcare tourism.

Pending further details of the acquisition, we are maintaining our BUY rating on IHH with TP of RM5.50 based on an unchanged 22x 2015 EV/EBITDA.

Source: Affin Hwang Capital Research - 5 Jan 2015