MAYBANK Investment Bank Bhd (Maybank IB) expects IHH Healthcare Bhd’s healthcare business will remain sustainable although there could be an incremental pressure on its affordability to the local communities amid rising healthcare cost globally.
The research house believed that social factor would be the biggest risk to IHH Healthcare’s profitability but the international healthcare service provider could be largely unaffected as its premier service offerings target the less price-sensitive patient pools globally.
“Given that the group offers premium healthcare services and its patients are less price-sensitive, we believe the group should be able to advance its healthcare services and adjust its prices in order to maintain its margins,” it said in a note today.
Maybank IB said IHH Healthcare is reputed for its premier service quality and is among the most prestigious in Asia, as well as Central and Eastern Europe.
Therefore, the group would be able to adjust its prices to pass on any cost inflation or healthcare reform costs, leaving its earnings before interest, tax, depreciation and amortisation margins largely intact.
As for the vulnerable communities, IHH Healthcare provides a considerable amount of resources via its various corporate social responsibility programmes, it added. – Oct 14, 2020
