IHH Healthcare to enhance growth through acquisition
KUCHING: IHH Healthcare Bhd (IHH Healthcare) is poised to seek opportunities through acquisition to enhance its growth.
AmResearch Sdn Bhd (AmResearch) in a report yesterday said it believes the healthcare provider will continue to look for acquisition opportunities to drive growth.
In the meantime, the research firm noted IHH Healthcare through its indirect-wholly-owned subsidiary Gleneagles Development Pte Ltd ( Gleneagles Development) acquired 51 per cent equity interest in Continental Hospitals Ltd (CHL) in India for approximately RM166.7 million recently.
Following a company search, AmResearch said CHL operates a 750-bed multispecialty hospital in Hyderabad, India with six Centres of Excellence.
The research firm observed that the hospital has being operating since March 2013 and is the first in India to receive the Joint International Accreditation (JCI) within two years.
Additionally, the research firm noted IHH Healthcare has an exposure in the Indian healthcare market earlier through a 10.8 per cent stake in Apollo Hospitals Enterprise Ltd to operate Apollo Gleneagles Hospital in Kolkata and Apollo Gleneagles PET-CT Centre in Hyderabad.
Furthermore, the research firm said IHH Healthcare also has a 50 per cent stake to develop the Gleneagles Khubchandani Hospital in Mumbai with a 450-bed capacity.
On another note, the research arm of TA Securities Holdings Bhd (TA Research) in a another report yesterday said the move to acquire equity stakes in CHL has allowed IHH Healthcare to broaden its exposure to the growing demand for private healthcare services in India.
The research firm believes the company could be increasing its grip in the healthcare industry in India through the acquisition of 51 per cent equity interest in CHL.
Therefore, TA Research said it is optimistic on the acquisition while allowing the company to extend its foothold into the fast growing healthcare sector of India.
AmResearch on the other hand said the acquisition will not have any material effect on the group’s earnings and net assets for FY15 while deemed the valuation of the company’s share price at current level to be fairly priced.
Thus, AmResearch maintained its earnings forecast for IHH Healthcare at this juncture, valuing the company’s share price with a fair value of RM5.40 per share.