KUALA LUMPUR: Maybank Investment Bank research believes IHH Healthcare Bhd
could still see earnings growth in FY19 on organic growth in home markets, reduced losses at GHK and better earnings at Fortis.
"Upside to our FY19-21F EPS may come from a more aggressive cost reduction drive at Fortis," it added.
In a Friday note, the research house maintained its buy call and target price of RM6.90.
It said key takeaways from a recent roadshow hosted for IHH include growing patient volume in Singapore and Malaysia, the completion of the renovation of Acibadem Masiak, the repayment of US$250mil debt is still pending Bank Negara approval and HK-GHK's occupancy rate, which stands at 60% while the timing of when GHK can break even was not provided.
Maybank IB added that the court hearing on the SIngh brothers-Daiichi Sankyop case has been adjourned to March 28 and IHH's 31% stake in Fortis remains status quo with the open offer for an additional 26% stake being delayed.
"Our earnings model has assumed for: (i) GHK – Lower negative EBITDA of MYR100m in FY19 (FY18: MYR201m), zero EBITDA in FY20 and positive EBITDA of MYR105m in FY21; (ii) Fortis – Breakeven in FY19 and PATMI of MYR19m/MYR27m in FY20-21.
"We have also assumed for IHH to own a 31% stake in Fortis in FY19 and 57% stake in FY20," said Maybank IB.
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