AmFraser Research, Feb 19
WE reaffirm our "hold" recommendation on IHH Healthcare with a lower sum of parts-based fair value of RM3.60 (about S$1.38)/share (against RM3.90/share previously). Our revised fair value follows the adjustment to our Ebitda to reflect: (1) slower ramp-up at Mount Novena Elizabeth; (2) foreign exchange rate assumption; and (3) full consolidation of Parkway Life Reit (36 per cent-owned) as a subsidiary.
While we like IHH's strong branding and good prospect, its valuation of 37 times forecast PE for FY2014 is lofty when compared to regional peers' 30 times, in our view. Going forward, expansion will mainly be in Malaysia and Turkey. As for Singapore, there is no further expansion besides the ramp-up of bed capacities.
HOLD
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