Prince Court hospital to contribute only 1% to IHH’s group earnings

On Tuesday, IHH announced it was buying Prince Court Medical Centre for cash consideration of RM1.02bil which works out to an implied EV/Ebitda (enterprise value/earnings before interest, tax, depreciation and amortisation) of 23.2 times which is at the higher-end of peer KPJ’s 14.7 times valuation.

KUALA LUMPUR: Kenanga Research expects Prince Court Medical Centre Sdn Bhd to to contribute less than 1% to IHH Healthcare’s group earnings based on the hospital’s normalised FY18 net profit of RM26mil.

In its research note issued on Wednesday, it also said the acquisition will only put a small dent to IHH’s net gearing of 0.2 times as at June 30, 2019.