IHH Healthcare - UOB Kay Hian 2023-12-01: All Segments Largely Delivered In 3Q23

• IHH Healthcare’s 3Q23 earnings came in within our expectations. Both Singapore and Malaysia saw improved revenue intensity, while the former experienced flattish volume growth.
• Meanwhile, Acibadem continues to command resilient patient volume despite its steep pricing adjustment, but contributions have been curtailed by inflation.
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3Q23 results withinour expectations.

• IHH Healthcare (SGX:Q0F) posted a 3Q23 core profit of RM352m (12.0% q-o-q, 11.9% y-o-y). This brought 9M23 core profit to RM998m (-4.1% y-o-y). Exceptionals amounting to RM163m, is largely attributed to RM224m of net monetary gain from hyperinflationary economies (Acibadem). Core profit is within our expectations, but below consensus’ expectations, with earnings accounting for 76% and 59% of full-year earnings forecasts respectively.

Singapore outshone Malaysia with sustained margins.

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• In Malaysia, revenue grew by 18% y-o-y off improved revenue intensity (6% y-o-y) and inpatient volume (11% y-o-y). Apart from organic growth brought about by its budgeted RM1b capex over the next five years, inorganic acquisitions such as the acquisition of Timberland Medical Centre in Sarawak will supplement growth as well. Inflationary cost may have curtailed margins by 2.9ppt as earnings only grew 3.7% y-o-y

Resilient top-line growth but weaker Lira cut into margins.

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Philip Wong UOB Kay Hian Research | https://research.uobkayhian.com/ 2023-12-01 SGinvestors.io

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