IHH
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medical stock that worth look upon
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Released 3Q13 results which offered no surprises, despite seasonal effects. The good news is the growth story at its new hospitals, while the bad news is confirmation of house view that rate charges at Singapore?s hospitals have peaked. Its valuation remains the only ugly facet of this story. 3Q13 and 9M13 core earnings were in line, accounting for 21% and 78% respectively of the house FY13 numbers. Make no changes to forecasts and SOTP TP stays intact. Overall, like the IHH franchise, but struggle to find any near-term catalysts, as the house expect better earnings only in FY15-16, and current valuations is decidedly unexciting. Maintain Neutral with $1.72 TP.
CIMB downgrades to Neutral with TP $1.72. Note that IHH?s stock has done very well since its IPO in Aug 12. It is now the most expensive stock to own among ASEAN hospital stocks (aside from Siloam International), even if we take into account its most extensive footprint. IHH has so far executed well in all its new markets, thanks to its vast experience accumulated over two decades. However, believe that there are difficulties from operating a larger and more complex organisation following its rapid addition of new hospitals and healthcare businesses. Though IHH should continue to benefit from growing private-healthcare consumption and revenue intensity in all its three markets, improving entry points and fundamentals for its regional peers may provide investors with better short- to mid-term returns. As such, the house downgrades IHH to Neutral from Outperform, advocating a switch to BGH and RFMD.
Y suddenly so bullish?
| IHH Healthcare-Likely further correction after key bearish breaks |
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By Philip Teo
Likely further correction after key bearish breaksKey supports breached.
IHH Healthcare could see more downside ahead after initiating strong bearish breaks below both its 6-month uptrend support and $1.55 key horizontal support on heavy volume yesterday.
Indicator is bearish.
The MACD has just plunged below the centerline as well, suggesting that the downside momentum is accelerating.
Next key support at $1.42.
The counter could possibly slip further towards the next key base at $1.42 (key resistance-turned-support) in the weeks ahead.
Immediate resistance at $1.55.
Meanwhile, $1.55 is now the newly established support-turned-resistance. |
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UOB Kay Hian note that 1H13 earnings rose 29% y/y and represents 44% of consensus estimates. Near-term risks are amplified on the back of the uncertain macroeconomic picture. Execution of its pipeline poses key challenges for the group. Currency volatility could impact bottom-line. Overall, house maintains SELL with a revised target price of $1.43.
Healthcare services provider IHH Healthcare reported a 61% fall in second-quarter net profit to 156.8 million ringgit ($60.4 million) as its earnings last year were boosted by the sale of medical suites.
...last: $1.55...
Thanks for the news, bought 26000 last week @ 1.59. Hoping for the best.
1Q core net profit (excl. exceptional items)
of RM133.5m was 17% higher than a year earlier, accounting for c.18% of
our FY13F earnings
Revenue and EBITDA grew by 29% and 24% to RM1.6bn and RM347.6m
respectively, partly driven by a full quarter of Acibadem's consolidation in 1Q13, compared to only two months a year earlier. In addition, the Group also saw revenue growth from existing operations and contribution from new hospitals
EBITDA margins (excl PREIT) weakened marginally by 0.8ppts to
21.7% (1Q12: 22.5%) as it saw continued losses from its new hospitals
It also faced cost pressures from personnel and operating lease expenses, particularly its Singapore hospitals
We estimate FY13F EBITDA margin to be 20.8%
Novena Hospital posted a smaller EBITDA loss of RM3m (from -RM15.6m/ -RM16.4m in 1Q12/ 4Q12) This was achieved on the back of higher revenue of RM37.2m and streamlining of its operating costs Hence, it seems like management's target of achieving EBITDA breakeven by 1H13 is within reach We raised our TP to S$1.55 (RM3.73) on the back of a higher
EV/EBITDA multiple of 22x (from 18x) on FY13F/14F earnings for its
Singapore operations and its international operations (14x, from 13x)
with the re-rating of peers
We also adjust for the higher market values for its holdings in listed entities, namely PREIT and Apollo Hospitals
Maintain HOLD, given its relatively rich valuations at 41x/35x on FY13F/14F earnings ,,,last done: $1.625...
DBS VICKERS Securities
Our recent visit to Mt. Elizabeth Novena Hospital suggests that it is
now at operational breakeven. With this, IHH has met one big
objective it set out during listing. Other targets are being met in an
equally unhurried fashion.
With very minor refinements to our
forecasts, we retain our Outperform
rating and SOP target price. A
continued operational ramp-up at
Novena and revenue intensity in all
its three markets with possible asset
recycling after its HK Hospital win could provide further catalysts, in
our view.Novena EBITDA breakeven
Our recent walkabout in IHH’s
Mount Elizabeth Novena Hospital in
Singapore suggested that this
state-of-the-art hospital has reached
operational breakeven, though the
numbers will likely show up only in
2Q13 results. Our conclusion is
based on conversations with various
staff on the ground, ward activities
and car-park volume.
Catalysts fulfilled and those
to watch out for
We previously mentioned two
catalysts for the stock.
1) The first was a
winning bid in Hong Kong, which
has come to pass. Following the
announcement, the stock had
reached our previous target price.
2) We believe the second, which is
EBITDA breakeven for Mount
Elizabeth Novena, will catalyse the
stock further. Asset-recycling
opportunities in relation to its
Malaysian assets may also emerge in
due course, with the channelling of
freed-up capital to its new growth
frontier in Hong Kong.
Lifting target price
We lift our SOP target price as we
shift our valuation to CY14, in
recognition of its milestones reached
over the nine months since its listing.
Investors can now focus on its next
growth propellers. An expected
ramp-up of its Novena hospital and
revenue intensity in all its three
markets should continue to spur
IHH’s growth.
We like IHH’s
excellent branding stemming from
its record of high-quality services,
extensive suite of premier medical
solutions and proven management
which had delivered superior
performances against peers in the
past. ...Last Done: $1.615...
Source : CIMB Research
IHH (Q0F.SG) is flat at $1.33, despite a generally buoyant market, after dropping 3.3% on Tuesday, with three analysts saying they weren't aware of a reason for the decline.
IHH's expansion plans are on track, but start-up costs should exert pressure on margins, creating a drag on FY13 EPS growth, Nomura says in a note after a company visit.
" Management conceded that its expansion in Turkey and Singapore will continue to drag margins but core operations remain strong as volumes and average selling prices are progressing well."
The house views IHH's valuations as expensive relative to its growth prospects, and notes its EPS forecasts and target price are below consensus
" We see risks to consensus earnings, particularly arising from greater-than-expected losses at Mount Elizabeth Novena." It expects Mount Elizabeth Novena break-even at the operating level in 2015, while a slower economy could affect patient admissions, with potential further drag from competition from the Farrer Park Hospital completion this year.
It keeps a Reduce call with MYR2.81 ($1.13) target on the Malaysian-listed share (5225.KU). Its Malaysian share is up 0.9% at MYR3.24.
Do you think it has anything to do with the forthcoming election in my?...
bishan22 ( Date: 22-Jan-2013 07:45) Posted:
Yesterday drop looks like a goner. Good luck.  |
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Yesterday drop looks like a goner. Good luck.
Fragrant smell?... lol...
slslslsl ( Date: 17-Dec-2012 14:53) Posted:
| can smell the chiong. How do you think? |
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Wa, very scary... Dropped like sheet!
Luckily I didn't get in @1.39 (was considering)... lol...
whereru ( Date: 21-Jan-2013 21:06) Posted:
| today drop quite abit' any bad news? |
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today drop quite abit' any bad news?
yes good point, it replaced NOL as a component stock.
dun think the ge will affect the share price, but do note this is a STI component stock. good growth stock.
mmmmmm ( Date: 10-Jan-2013 12:39) Posted:
| Been watching IHH closely. It has been going up steadily from about 1.25 to right now about 1.39. It has been floating between 1.37 to 1.39 for the pasdt fortnight. Does anyone think it is a good buy at current prices ? I am tempted to take the plunge in light of upcoming elections in Malaysia as this stock has links to Khazanah Nasional. Any advise or opinions please ? |
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Been watching IHH closely. It has been going up steadily from about 1.25 to right now about 1.39. It has been floating between 1.37 to 1.39 for the pasdt fortnight. Does anyone think it is a good buy at current prices ? I am tempted to take the plunge in light of upcoming elections in Malaysia as this stock has links to Khazanah Nasional. Any advise or opinions please ?
can smell the chiong. How do you think?
