IHH Healthcare

UOBKayhian on 29 Aug 2014

FY14F PE (x): 52.6
FY15F PE (x): 40.7
Results in line. IHH Healthcare (IHH) reported strong performance at its existing
hospitals and the continuous ramp-up of new hospitals. Parkway Pantai, Acibadem and
IMU Health reported 2Q14 revenue growth of 12% yoy each on a constant currency
basis, and EBITDA growth of 18%, 13% and 17% respectively. 1H14 revenue and net
profit represent 47-48% of our full-year forecasts.
Valuations lofty; downgrade to SELL. We have a higher target price of S$1.60 after we
adjusted for a higher peer-average EV/EBITDA multiple. Nonetheless, we think
valuations are rich with the stock currently trading at a 2015F PE of 41x vs the peer
average of 25x. Within the Singapore-listed healthcare space, we prefer Raffles
Medical and QT Vascular for those with a more aggressive risk appetite.