PETALING JAYA: IHH Healthcare Bhd is setting aside about RM100mil as part of its digital transformation plan to provide a more seamless experience for its patients.

       Hong Leong Investment Bank Research (HLIB Research) said the plan will take about four years to complete.

       “In order to collect data in a more systematic way, IHH has rolled out a Hospital Information System (HIS) in several hospitals in Malaysia and is targeting to introduce the system to its hospitals in Singapore,” it said in a report yesterday.

       HLIB Research noted that while the HIS and upcoming application is unlikely to contribute directly to IHH profits at this juncture, it believes the collected data can be used for research purposes and indirectly improve the overall clinical outcomes with the use of data analytics.

       The research firm reiterated its “buy” call on IHH, with an unchanged sum of parts derived target price of RM7.51.

       It said IHH’s longer-term growth trajectory remains strong, hinging on its efforts to continue improving returns on equity (ROE).

       “IHH’s refreshed strategy to double its ROE from 2020 to 2024 has started to bear fruit, where its ROE improved from 3.8% in 2019 to an average of 6.6% year-to-date for the financial year 2021,” HLIB Research said.

       Meanwhile, despite the Turkish lira depreciation, HLIB Research said IHH’s unit, Turkey-based Acibadem Healthcare Group, is on a much stronger footing currently to withstand any volatility in the lira.

       This is considering that it has hedged 95% of its non-lira borrowings through constant currency swaps, while the remaining 5% is mitigated by foreign currency deposits amounting to some €25mil (RM119mil) to €30mil (RM143mil).

       “Acibadem also has a partial neutral hedge, as 40% of its revenue generated are denominated in foreign currencies (including the US dollar and euro), due to revenue receipts from foreign patients as well as Acibadem’s operations in Europe,” it said.