IHH Healthcare - RHB Research 2026-03-03: Efficiency-Led Growth At a Fair Price; Downgrade to NEUTRAL

• We view IHH Healthcare as a high-quality defensive play, but the current share price leaves little room for error. Our downgrade reflects a wait-and see approach as we anticipate a slower Singapore recovery (pushed to 2H26) and a normalisation of Malaysian margins from the recent 29% peak.

• - Read this at SGinvestors.io -

IHH 2030 Strategy.

• While the target of adding 4,000+ beds remains, the timeline has been extended to 2030 following the pivot towards day care model, which helps free up inpatient bed capacity. Expansion will prioritise brownfield developments in markets with structural bed shortages, particularly India and Malaysia.

• Although expansion continues in hospitals with occupancy rates above 80%, the emphasis in Malaysia will be on secondary hospitals. No specific capex guidance was provided, but management indicated expansions will be funded internally and are expected to be ROE-accretive.

Targets and operational updates.

• - Read this at SGinvestors.io -

• In India, weaker EBITDA margins were due to one-off expenses (labour code and property revaluation); excluding these, margins would have been closer to 20%.

• Malaysia remains a bright spot, with 29% EBITDA margin in 4Q25, though we expect this to normalise toward mid-20% range due to wage hikes and supplier renegotiations.

• Meanwhile, growth momentum in Turkey and Europe is expected to remain intact.

Earnings revision.

• Read more at SGinvestors.io.

Eddy Do RHB Securities Research | https://www.rhbgroup.com/ 2026-03-03

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