[%Cstv%] 
Research by HLIB
BUY – TP RM7.70

" Good asset at a reasonable price ”

IHH announced that it has entered into a sale and purchase agreement with Comprehensive Care for the proposed acquisition of Island Hospital for an EV consideration of RM4.2bn (equity + net debt). Excluding the value of the adjacent vacant land, the implied FYE Dec 2024f EV/EBITDA of this acquisition will be 19.2x, which is lower than past deals. We view this Island Hospital acquisition positively given (i) the assets are of high quality, good brand-name and strategically located on Penang Island but with a reasonable/attractive EV/EBITDA price tag, (ii) the deal is core earnings accretive from FY25f onwards despite with our conservative assumptions, (iii) an indication of IHH sticking to its disciplined M&A rules, and (iv) Island Hospital does not fall onto the hands of IHH’s competitors. Maintain BUY on IHH with an unchanged SOP- derived TP of RM7.70.  
 
Analyst:
Chee Kok Siang
[%xAFU%]

$KLSE-IHH 
Research by HLIB
BUY – TP RM7.70

" Good asset at a reasonable price ”

IHH announced that it has entered into a sale and purchase agreement with Comprehensive Care for the proposed acquisition of Island Hospital for an EV consideration of RM4.2bn (equity + net debt). Excluding the value of the adjacent vacant land, the implied FYE Dec 2024f EV/EBITDA of this acquisition will be 19.2x, which is lower than past deals. We view this Island Hospital acquisition positively given (i) the assets are of high quality, good brand-name and strategically located on Penang Island but with a reasonable/attractive EV/EBITDA price tag, (ii) the deal is core earnings accretive from FY25f onwards despite with our conservative assumptions, (iii) an indication of IHH sticking to its disciplined M&A rules, and (iv) Island Hospital does not fall onto the hands of IHH’s competitors. Maintain BUY on IHH with an unchanged SOP- derived TP of RM7.70.  
 
Analyst:
Chee Kok Siang
cheeks@hlib.hongleong.com.my