PETALING JAYA: IHH Healthcare Bhd is in a good position to ride on the challenges amid Covid-19 owing to its diverse operations, diversification and strategic plans.
MIDF Research said judging by the group’s strategies, it showed IHH’s preparedness against the pandemic in the near term.
“Despite hurdles from the ongoing pandemic, IHH is optimistic of a progressive recovery powered by long-term major trends and strategy plans – including Budget 2022 – as it transitions to a post-pandemic environment.
“IHH’s operations are diverse, giving it the ability to withstand the onset of the pandemic and the impact it brings.
“As such, the group is planning to step up its efforts to increase patient volume and further diversify its revenue streams – including providing Covid-19-related services, treatment and research,” the research house said in its latest report.
The group’s operations in Malaysia, Singapore, India, Turkey, and Hong Kong have stepped up to assist governments and the public sector in vaccination rollouts. Covid-19-related services accounted for about 6% to 29% of the third quarter (Q3) of financial year 2021 revenues from its home market activities.
MIDF Research also said the pandemic had given IHH the opportunity to explore greater digitalisation and technology adoption to boost efficiency and capitalise on disruption prospects.
Considering IHH’s outstanding performance for Q3 of FY21, MIDF Research has revised upward IHH’s earnings estimates by 90% for FY21 and 72% for FY22.
The research house, which is maintaining a “buy” call on IHH, has revised the group’s target price to RM7.25 from RM6.35 previously.
IHH’s net profit surged to RM550mil in Q3 ended Sept 30, 2021 from the RM309.95mil posted in the same quarter last year.
Meanwhile, CGS-CIMB Research expects higher operating leverage on better economies of scale.
“We keep our FY21-FY22 forecast earnings per share (EPS) unchanged pending the company’s briefing,” the research house said.