IHH's refreshed brand logo on display at the Prince Court Medical Centre reception area
PETALING JAYA: IHH Healthcare Bhd
is set to intensify development spending over the next five years, with plans to expand its bed capacity by more than 30% – or about 4,000 beds – across Malaysia, India, Turkiye and Europe.
Analysts believe this expansion drive, combined with renewed prospects in India following a major regulatory approval, could strengthen the group’s long-term growth trajectory despite near-term uncertainty.
RHB Research said the Securities and Exchange Board of India’s approval has removed a seven-year regulatory overhang and reopens IHH’s India growth story.
The decision allows IHH to proceed with mandatory open offers for Fortis Healthcare Ltd and Fortis Malar Hospitals Ltd – bids that were stalled since 2018 due to litigation involving Fortis’ former promoters.
“We see two key angles for IHH – a fast-growing FBM KLCI stock, and a cheaper alternative to Fortis,” RHB Research noted, projecting a two-year compounded annual growth rate of 11% in profit after tax and minority interest.
The research house kept its “buy” call on IHH, with a higher target price of RM9 per share, up from RM8.
RHB Research added that the revised valuation reflected updated market prices for listed subsidiaries, and a higher ascribed 2026 enterprise value-to-earnings before interest, tax, depreciation and amortisation multiple for non-listed hospital operations of 14 times, compared with 13 times previously.
“We like IHH for its solid execution, reputable regional footprint, and focus on affluent clientele which underpins earnings resilience,” the research house said.
Should IHH’s mandatory open offer for Fortis be fully accepted, its stake could rise from about 31% to 57%.
RHB Research estimated that the total funding requirement for the open offer could potentially reach up to 251.5 billion rupees or about RM11.9bil, assuming full take-up and a 30% premium to Fortis’ last closing price.
The research house expects the group to fund the acquisition mainly via debt facilities, which could raise its 2026 net gearing (including leases) to 0.55 times.
CIMB Research similarly maintained a “buy” rating on IHH, but said the mandatory takeover offer “is unlikely to succeed given that Fortis’s current share price of 980 rupees per share is significantly higher than the offer price of 170 rupees per share first proposed in 2018.
Consequently, it does not expect a material earnings impact from the development.
“We raise our target price to RM9 from RM8.50 after adjusting our sum-of-the-parts valuation to reflect the latest market capitalisation of IHH’s subsidiary companies,” CIMB Research said.
The research house also revised its 2025 to 2027 core net profit forecasts slightly higher by up to 2%, attributing this to “minor housekeeping adjustments”.
CIMB Research added that near-term earnings would be supported by “the recovery of its Singapore operations following the completion of Mount Elizabeth Hospital’s renovation by the third quarter of this year” and “an anticipated influx of medical tourists to Malaysia in conjunction with Visit Malaysia 2026”.
Kenanga Research, meanwhile, downgraded its call to “market perform” from “outperform” for IHH, rolling forward its valuation base year to 2027 and lifting its target price to RM8.50 from RM8.11.
“Pending further development on this latest corporate news, we maintain our forecasts,” it said, noting that the 18% share price rally in the past month has already “factored in some re-rating impact for now”.
While Kenanga Research believes IHH’s open offer for Fortis is less likely to happen due to the current market price which is five times higher than the offer price, it remained optimistic about the group’s operational outlook.
“We expect IHH’s earnings momentum to accelerate, underpinned by revenue intensity and rising demand for the remainder of this year,” the research house added, citing recovery in Singapore and Malaysia, medical tourism in Turkiye, and improving cost efficiency in India as key drivers.
