FW: AmBank Research - IHH Healthcare : Looking forward to a stronger 2HFY17 Hold, 13 Sep 2017

 

STOCK FOCUS OF THE DAY

IHH Healthcare :  Looking forward to a stronger 2HFY17               Hold

 

We maintain HOLD on IHH Healthcare with a lower FV of RM6.33 (vs. RM6.70 previously), based on DCF (WACC: 8.27%, terminal growth rate: 3.5%). We have rolled forward our valuation base year to FY18. Recall that IHH’s 2Q17 results missed our and consensus’ estimates due to the higher-than-expected one-off start-up cost incurred by Gleneagles Hong Kong Hospital (GHK). We have trimmed our earnings forecasts by 35%/33%/17% for FY17/18/19F to account for higher start-up costs and gestation losses from new hospitals.

 

We believe the group’s performance will improve from 2HFY17 onwards on the back of the ramping-up of new hospitals, particularly GHK. Revenue is poised to grow by 25% in FY18, underpinned by a 4-5% increase in bed capacity. The expansion of Pantai Hospital Kuala Lumpur and opening of Gleneagles Chengdu will contribute an additional 470 beds in FY18.  Nonetheless, we believe the current share price has very much priced in IHH’s fundamentals.

 

Others :

Hap Seng Plant : Flat FFB  in FY17F            Unrated

 

QUICK TAKE

Inari Amerton : Anniversary phone to boost sales             Hold

 

STOCK ON RADAR

Systech, Kronologi Asia, MMS Ventures, Mircolink Solutions

 

ECONOMIC HIGHLIGHT

UK – BoE in a limbo with inflation data

 

NEWS HIGHLIGHTS

Rubber Gloves Sector : Margma: Rubber glove prices expected to increase by up to 12%

EWI : To launch 2nd Aussie project worth RM825.7m by end-September

Highway Operators : ‘No intention to sell PLUS stakes for now’

Sunway : Eyes land near new public infrastructure

 

 

DISCLAIMER:

The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.