IHH

[winston]

Listing of IHH could boost sector

IHH will be offering 2.23b shares (80% of which will be new shares) for its IPO in KL and Singapore, likely in Jul 12. It is expected to raise US$2b (RM6.4b) in this IPO.

Malaysia’s EPF and SWF Kuwait Investment Authority (KIA) are said to be the biggest cornerstone investors. Other cornerstone investors are said to include BlackRock Inc, Capital Group, Och-Ziff Capital Management Group and IFC (financial arm of the World Bank).

Singapore retail investors would be able to apply for 52m shares (2.3% of the share offering), while 36m shares would be privately placed to investors.

IHH intends to use the bulk of the proceeds to pay off debts. IHH has no fixed dividend policy – before it was delisted, Parkway typically distributes at least 50% of its earnings, while the last time Acibadem distributed dividends was for FY07.


Asia’s biggest hospital operator.

IHH owns Turkish hospital group Acibadem AS (60%), Singapore’s Parkway Holdings (100%), India’s Apollo Hospitals Enterprise Ltd (11.2%) and Malaysia’s Pantai Hospitals (100%) and International Medical University (100%). It has a number of hospital projects (providing about 3,300 beds) in the pipeline, which when completed, could boost to growth.


Possible boost for the sector.

The upcoming IPO could result in greater interest in Singapore’s Healthcare sector, and could possibly lend a slight boost to the share prices of the other SGX-listed healthcare providers. Assuming it raises RM6.4b, this works out to be RM2.86 / share. At an exchange rate of S$1=RM2.430, this translates to a price of S$1.18 / share or a P/E of 35x based on FY12 annualized EPS.

Other regional healthcare peers (excluding Fortis Healthcare (Unrated)) are trading at an average P/E of 23.8x. Raffles Medical (BUY\TP: S$2.67) (its closest SGX-listed peer) is trading at 22.9x P/E. Nonetheless, we note that IHH is a large healthcare provider with about 4,900 beds, and significant global operations that span across Singapore, Malaysia, India and Turkey.

It would be in a good position to benefit from Asia’s growing medical tourism. Regional peers’ do not have significant overseas operations. Hence, a large healthcare provider like IHH would be expected to trade at a premium to peers. Fortis Healthcare, an Indian healthcare provider with over 10,000 beds, is trading at 55x P/E.

http://www.remisiers.org/cms_images/res ... update.pdf

[winston]

IPO Price: Sin$1.18

[winston]

Keen interest in IHH Healthcare IPO even at RM2.85 By Anita Gabriel
June 27, 2012

THE region's second-largest share offering this year, IHH Healthcare, a joint listing on the Singapore Exchange and Bursa Malaysia, is creating plenty of buzz in the investing fraternity.

But IHH's key promoter and controlling shareholder, Malaysia's sovereign wealth fund Khazanah Nasional, may appear to some to be a tad ambitious in pricing its health-care jewel.

The final pricing has not been set yet but IHH's speculated offer price of RM2.85 - which translates to an earnings multiple of a whopping 93 times, based on financial year 2011 earnings - appears to be a very aggressive valuation. Its global health-care peers are trading at an average of 28 times price earnings.

The expectations appear even more inflated against a backdrop of bruised investor sentiment, volatile markets and a fragile global economy.

If the pricing succeeds, it will be a shrewd move by Khazanah, which two years ago privatised Singapore-listed Parkway Holdings at some 30 times earnings.

Still, the allure of what will soon become the world's largest listed health-care firm is probably best reflected by the beeline made by highly disciplined and savvy investors to become cornerstone investors in IHH.

In Singapore, they include tycoon Ong Beng Seng, Government of Singapore Investment Corp and Fullerton Fund Management.

'We're a 'corner-pebble' in the IPO. IHH is the best thing in town today,' Mr Mokhzani Mahathir, owner of Kencana Capital, one of IHH's cornerstone investors, told The Straits Times.

IHH is offering 2.23 billion shares - 80 per cent of them new shares - for the listing, set to raise US$2 billion (S$2.5 billion) next month.

OSK-DMG Research said the suggested valuation is justified as none of IHH's regional peers has significant operations overseas.

IHH operates more than 4,900 beds in 30 hospitals, mostly in Singapore, Malaysia and Turkey, with more than 3,300 new beds in the pipeline.

A better valuation benchmark for the health-care firm, say analysts, is the Ev/Ebitda ratio (enterprise value divided by earnings before interest, tax, depreciation and amortisation).

Analysts' estimates, based on the offer price, show IHH is priced at 16.5 times to 17.6 times Ev/Ebitda - a relatively fair valuation against its regional peers' trading average of 15 times based on Bloomberg data.

It also compares favourably with Khazanah's takeover of Parkway, pegged at 26 times Ev/Ebitda, which implies IHH investors can look forward to more upside.

'There is really no company like this in Asia with the market position and geographic spread of IHH. So some premium is justified,' private equity firm Symphony International Holdings director Anil Thadani, formerly a Parkway director, told The Straits Times. Symphony will swop its shares in IHH-controlled Acibadem of Turkey for shares in IHH post-listing.

Whichever way you slice the valuation, IHH's extensive cast of cornerstone investors and the relatively small retail offering mean it is unlikely to flop the way Facebook's IPO did a month ago.

'My gut feel is that it's going to be a success,' said Mr Christopher Wong, senior investment manager at Aberdeen Asset Management in Singapore.


Source: Straits Times

[winston]

not vested

Valuation


We initiate coverage on IHH with a Hold recommendation.

Given the high predictability, stability and captive earnings streams in the healthcare services, we are using 2013 EV/EBITDA valuation methodology in our sum-of-parts valuation.

Our target price is RM2.94 based on sum-of-parts valuation. This is just a 3% upside from the indicative IPO price of RM2.85, which could be revised lower depending on the book-building exercise. The retail and institutional IPO price will be the same.

Source: ECM Libra

[winston]

not vested

PE 60 ?

EPS growth 50% ?

Yield 0.3% ?

Why bother ?

[winston]

not vested

STOCKS NEWS SINGAPORE-DBS starts IHH Healthcare at 'buy'

DBS Vickers initiated coverage of IHH Healthcare with a 'buy' rating and target price of S$1.38, citing positive industry trends in the region.

At 0223 GMT, IHH Healthcare shares were up 0.4 percent at S$1.245, 11.9 percent above its initial public offer price of S$1.113. IHH made its Singapore market debut on July 25, after raising $2.1 billion in its IPO.

IHH, one of the largest healthcare providers in the world, is expected to add more than 3,300 beds in 17 hospitals, bringing the total number of beds it owns to 8,350, DBS said.

The company is also likely to benefit from Asia's ageing population, developing healthcare markets, rising affluence and the growth of medical tourism in the region, DBS said.

The brokerage values IHH's shares at 36 times its price-to earnings for 2013, and expects the company to see annual revenue grow at an average rate of 16.4 percent for 2011-2014, driven by expanding network and higher patient load.

Source: Reuters

[winston]

not vested

IHH Healthcare's Q2 profit soar on sale of medical suites By Carine Lee

Singapore-listed IHH Healthcare Berhad said on Tuesday that its profit for the fiscal second quarter ended June 30, 2012 rose more than five-fold to RM403.54 million (S$162.1 million) from RM76.67 million a year earlier.

Revenue was RM2.7 billion for the quarter, up from RM815.97 million a year ago.

Q2's results include recognition of profits from the sale of 216 medical suites at Mount Elizabeth Novena Specialist Centre, and the consolidation of Acidadem Holdings from Jan 24, 2012.

Normalised revenue, which excludes the sale of the medical suites, was RM1.5 billion, up 82 per cent from a year ago.

http://www.businesstimes.com.sg/breakin ... s-20120828

[winston]

not vested

Destined to Reign
OUTPERFORM - N/A
Share Price S$1.25
Tgt. S$1.53

--------------------------------------------------------------------------------

We believe IHH’s extensive footprint in a defensive sector is one of the best business models around.

It possesses steady-growth profile, driven by unquenchable demands for better healthcare needs.

This is a direct play on the rising global healthcare costs.

IHH has an extensive footprint in Asia and the CEEMENA region, which we believe has an unparalleled dominance in the private healthcare space globally.

In our opinion, this underscore the sustained profitability of the group, and status as the world premier private healthcare play.

We initiate coverage with Outperform and an SOP target price of S$1.53.


Source: CIMB

[winston]

not vested

IHH Healthcare - A Cut Above the Rest (Initiate with a Hold, IHH MK, MYR3.20 - TP MYR3.15, Healthcare)

IHH is one of the largest listed private healthcare providers in the world, with leading positions in Singapore, Malaysia and Turkey. The company has aggressive plans to increase bed capacity by 68% over the next four years.

The healthcare sectors in these key markets are supported by positive industry factors such as growing elderly population as well as rising demand for quality healthcare.

Given its leading market position and expected net profit CAGR of 38% over FY12F-FY16F, we believe IHH does deserve a valuation premium.

However, much of its near-term prospects are priced in. Our TP of MYR3.15 is pegged to 1x PEG (38x FY13F) and investors may do well to wait for a more attractive entry point.


Source: Kim Eng

[winston]

not vested

Trades at 34.3x FY13F consensus PER

Key risks moving forward include a possible delay in elective surgeries by some medical tourists, given the strong Singapore dollar and tepid economic conditions.

We do not have a rating on IHH. But according to Bloomberg, there are currently 12 BUYs, 5 HOLDs and 4 SELLs on the stock with an average consensus target price of S$1.31.

Source: OCBC