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IHH Healthcare - Maybank Research 2022-02-24: A Commendable FY21

IHH HEALTHCARE BERHAD (SGX:Q0F) | SGinvestors.io IHH HEALTHCARE BERHAD (SGX:Q0F)

IHH Healthcare - A Commendable FY21

  • IHH Healthcare (SGX:Q0F) ended FY21 on a strong note, with 4Q21 earnings up 33%, while full-year results exceeded our/consensus expectations by 7%. We believe the recovery of patient volumes should drive the growth ahead, notwithstanding the potential moderating of revenue intensity and COVID-19 related revenues.
  • The recent weakness in IHH Healthcare's share price is unwarranted in our view, and at 31x FY22E P/E, the stock is trading at more than 1 standard deviation below its 5-year mean.
  • Maintain BUY call on IHH Healthcare with a higher SOP-derived target price of RM7.60.



Ending on a strong note

  • IHH Healthcare's 4Q21 core PATMI was up 33% y-o-y to RM441m, mainly on the back of
    1. higher patient volumes across most of its key markets,
    2. higher revenue intensity due to higher mix of complex cases, and
    3. sustained COVID-19 related revenues due to the Omicron wave.
  • Full-year earnings were up 127% to RM1.58bn and were ahead of both our and consensus estimates by 7%. IHH Healthcare also declared a RM0.06 dividend for FY21 (33% payout of core PATMI).


Key operational metrics remained encouraging

  • On a full-year basis, patient volumes grew by 18% for both India and Acibadem due to faster economic reopening. It was however flattish for Singapore and a slight decline of 4% for Malaysia. Nonetheless, revenue intensity grew by 8-21% across the key markets due to higher mix of complex cases, although we saw some tapering towards the 2H21 as patient mix began to normalise.
  • COVID-19 related revenues remained a strong contributor at 6-29% of IHH Healthcare's 4Q21 revenues in the key markets. The consolidation of several hospitals also fuelled FY21 revenue growth, though the group incurred higher staff and COVID-19 related costs.

Volume recovery-led growth ahead






Shafiq Kadir Maybank Research | https://www.maybank-ke.com.sg/ 2022-02-24
SGX Stock Analyst Report BUY MAINTAIN BUY 2.45 UP 2.430



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