Thursday, September 19, 2013

IHH - better than KPJ

It is faring better than KPJ due to its larger hospital network and earnings better, which tempers the impact of start up costs to a certain degrees. The company had some 5463 beds in Malaysia, Singapore, Turkey and India as at end 2012.

Its newly opened hospitals are also turning around faring quickly. The Mount Elizabeth Novena Hospital in Singapore, which opened in June 2012 was already earnings positive in 2QFY2013. The same goes for the Acibadem in Turkey. However, the Acibadem reported lower operating losses in the latest quarter.

IHH has budgeted rm2.75 billion in capex for the next 3 ½ years – for new hospitals in Malaysia, Turkey, India and HK as well as an expansion of existing facilities.

Among the larger projects in the pipeline are the Gleneagles Medini in Iskandar Malaysia, and Gleneagles in HK. The latter in which IHH has a 60% stake – is estimated to cost rm2.1 billion, including land cost, and is targeted for completion by late 2016.

The company is also undertaking management agreements for hospitals in China, Vietnam and UAE, as a means of securing a foothold in these markets. In all, estimate total numbers of bed to grow 70% by 2016.

IHH also plans to unveil a dividend policy by end 2013. Market observers assume a 50% payout ratio. Gearing stood at just 12% as at end June 2013.

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Please note that all data given are merely blogger's opinion. It is strongly recommended that you do your own analysis and research before investing.