[%RyES%] 
Research by Public
Outperform– TP RM7.68

" To Acquire Penang Island Hospital – A Medical Tourism Powerhouse ”

IHH Healthcare (IHH) has announced a proposal to acquire a 100% stake in Island Hospital Sdn Bhd (IHSB), a Penang-based hospital with a potential total capacity of 600 beds, for a total cash consideration of RM3.92bn, from Comprehensive Care Sdn Bhd (CCSB). This acquisition will strengthen IHH’s foothold in Penang and strategically position it to capitalise on the region's strong growth in medical tourism especially from Indonesia. We are positive on IHH’s move, as this will help the Group to strengthen its competitive position by leveraging synergies with its two existing facilities, Gleneagles Hospital Penang and Pantai Hospital Penang, thereby establishing a network of c.1,000 operational beds in Penang. The acquisition is targeted to complete by the end FY24F, and is expected to be earnings accretive after FY26F. However, our preliminary estimates suggest that FY25-26F earnings may drop by <5% due to additional interest cost to be incurred. At this juncture, we maintain our forecast pending the completion of this acquisition. Maintain our Outperform call with an unchanged TP of RM7.68.

Analyst:
Thye May Ting
[%suGl%]

$KLSE-IHH 
Research by Public
Outperform– TP RM7.68

" To Acquire Penang Island Hospital – A Medical Tourism Powerhouse ”

IHH Healthcare (IHH) has announced a proposal to acquire a 100% stake in Island Hospital Sdn Bhd (IHSB), a Penang-based hospital with a potential total capacity of 600 beds, for a total cash consideration of RM3.92bn, from Comprehensive Care Sdn Bhd (CCSB). This acquisition will strengthen IHH’s foothold in Penang and strategically position it to capitalise on the region's strong growth in medical tourism especially from Indonesia. We are positive on IHH’s move, as this will help the Group to strengthen its competitive position by leveraging synergies with its two existing facilities, Gleneagles Hospital Penang and Pantai Hospital Penang, thereby establishing a network of c.1,000 operational beds in Penang. The acquisition is targeted to complete by the end FY24F, and is expected to be earnings accretive after FY26F. However, our preliminary estimates suggest that FY25-26F earnings may drop by <5% due to additional interest cost to be incurred. At this juncture, we maintain our forecast pending the completion of this acquisition. Maintain our Outperform call with an unchanged TP of RM7.68.

Analyst:
Thye May Ting
thye.mayting@publicinvestbank.com.my