IHH Healthcare - DBS Research 2025-01-21: Penang ~ A Strategic Blueprint For Growth In Malaysia

• IHH Healthcare (SGX:Q0F) is one of Asia’s largest healthcare service providers, with footprints in strong Asian key growth markets – including Malaysia, Singapore, Hong Kong, India, China, and Türkiye.

33% boost in organic bed capacity across regions to drive a 10% CAGR in hospital and healthcare revenue.

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• Most of this growth will come from India, where 1,860 (+34%) new beds will be added, followed by Malaysia with 1,300 (+46%) beds. Europe will see an addition of 400 (+38%) beds while Hong Kong and Turkiye are expected to contribute with 170 (+65%) and 120 (+5%) additional beds, respectively.
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Doubling down on growth and enhancing network of hospitals in Malaysia could fuel IHH MY’s topline growth at a 13% CAGR.

• IHH Malaysia boasts of an extensive network of hospitals comprising 11 Pantai hospitals, four Gleneagles Hospitals, one Island Hospital, one Prince Court Medical Centre, and one Timberland Medical Centre.
• IHH Healthcare’s Penang is the second largest cluster in Malaysia after Klang Valley, and we believe it will be a strategic frontier for growth, especially after the Island Hospital acquisition.
• On a broader country level, we expect IHH Healthcare to retain its stronghold in Malaysia as it executes on its target to add 1300 beds by 2028 via organic expansion. Considering these expansion plans, we project IHH Malaysia’s topline growth at a 13% CAGR between FY23-FY26F.

Highlights of site visit to Penang

Penang growth story as a piece of a larger puzzle; more room for patients across all three hospitals in the years ahead.

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Amanda TAN DBS Group Research | Andy SIM CFA DBS Group Research | https://www.dbs.com/insightsdirect/ 2025-01-21 SGinvestors.io

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