PETALING JAYA: IHH Healthcare Bhd
could see its earnings before interest, taxes, depreciation and amortisation (Ebitda) margins expand from its newly acquired ambulatory care centre in Johor once the facility matures and is fully integrated with Gleneagles Hospital Johor.
MBSB Research said the acquisition of Afiniti Wellness in Medini, Iskandar Puteri, could improve patient throughput and allow the hospital to focus on higher- margin complex medical procedures, although the transaction value was not disclosed.
“However, if we compare with regional healthcare hubs similar in operational structure to this campus, the average daycare outpatient volume growth is 15% to 25% higher, while complex inpatient cases yield approximately five times higher in revenue per admission,” the research house said.
“Given these increments, we opine that, should the acquired facility mature and fully integrate with Gleneagles Hospital Johor, we expect an expansion of Ebitda margin up to 26% to 28%.”
The research house said the potential improvement would come from lower operating overheads at ambulatory care centres and optimising inpatient beds for complex surgeries involving oncology, cardiology and orthopaedics.
“In the near term (12 to 18 months), we do not expect additional earnings, considering that the integration could minorly add into retrofitting cost and initial setups.
“However, in the medium term (24 to 36 months), we anticipate revenue growth in IHH’s high-margin segments as the acquired ambulatory care centre becomes fully operational.”
MBSB Research said the acquisition would support IHH’s development of an integrated 18-acre healthcare campus, with a combined capacity of 350 beds and a potential additional 150-bed inpatient block for advanced tertiary and quaternary care.
The five-storey Afiniti Wellness complex will be converted into a dedicated outpatient and day-care facility, providing specialist consultations, diagnostic services, health screenings and day surgeries.
However, the research house cautioned that staffing shortages, competition for medical professionals and regulatory approvals could affect the project’s integration and profitability.
“Scaling up to a 350-bed (and potentially 500-bed) campus requires recruiting and retaining high volumes of skilled clinical staff.”
It has maintained a “buy” recommendation on the stock with an unchanged target price of RM10.18 per share.
Meanwhile, CIMB Research viewed the acquisition positively, citing the significantly higher patient turnover achievable through ambulatory care centres compared with conventional inpatient facilities.
“We view the acquisition positively, underpinned by the stronger throughput potential of day-care patients versus inpatients, with day-care patient turnover typically at least three times higher,” the research house said.
“This translates into better operating leverage and asset utilisation, despite the revenue intensity of day-care cases generally being 40% to 50% lower than that of inpatient cases.”
CIMB Research noted the acquisition represents IHH’s first major ambulatory care centre expansion since unveiling its growth strategy for such facilities in May 2026.
“While the acquisition value was not disclosed, we understand the required capital expenditure to be relatively modest, given that the facility is intended to operate as an ambulatory care centre and therefore does not require significant investment in advanced medical equipment typically associated with acute-care hospitals,” it said.
The research house maintained a “buy” call and RM10.30 per share target price on the company, with earnings forecasts unchanged as the expansion was already within its expectations.
