GENERALLY, private healthcare players recorded solid results in the first half of financial year 2025 (1HFY25).
Overall, IHH Healthcare (IHH)’s 1HFY25 was driven by higher revenue intensity underpinned by inpatient throughput and revenue per inpatient.
“Overall quarter-on-quarter (QoQ) for quarter two financial year 2025 (2QFY25), its revenue per inpatient fell in Singapore (-2%) and Malaysia (-3%) but was higher in India (+1%) and Türkiye (+11%),” said Kenanga.
On the other hand, inpatient admission was higher in Malaysia (+3%), Singapore (+1%) and India (+6%) but marginally but lower in Türkiye (-3%). This brought 2QFY25 core net profit lower by 1.4% at RM419 mil.
Looking ahead in Singapore, despite the renovation works at Mount Elizabeth Orchard, 2QFY25 earnings before interest, tax, depreciation (EBITDA) and amortisation margin remained solid at 28% due to various measures including reduced length of hospital stay and improved patient outcome, reflecting its strategy which led to higher revenue per inpatient.
The group in 2QFY25 saw a structural shift from the healthcare model with its increasing focus on day-care and skew towards more surgical cases, while moving away from medical cases.
For example, gallbladder surgery and angiogram can be done via day-care instead of inpatient. The shift was largely due to the fact that many of the procedures conducted as an inpatient can be done via day-care.
Generally, day-care treatment refers to a patient’s pre-planned medical procedures, both surgical and non-surgical, which require a short hospital stay, with admission, treatment, and discharge occurring on the same day.
We believe margins are not expected to be crimped because day-care requires less operating costs. Typically, inpatient wards need three shifts of nurses and 24 hours operations. However, day-care requires 1 shift of nurses, and the wards are not operating overnight.
Specifically, net day-care revenue and volume rose 20% and 80%, respectively. Despite pressure from payors and IHH giving discounts, revenue intensity and EBITDA margin remain steady.
KPJ’s 1HFY25 net profit grew 26% YoY on higher average revenue per inpatient and better yields from more surgeries but only barely met consensus.
KPJ is cautiously optimistic that a few hospitals under gestation would be expected to turn from a pre-tax loss to a pre-tax profit. It is optimistic for earnings to gain momentum moving into 2HFY25 supported by better operational efficiencies stemming from ongoing cost optimisation efforts.
Overall, we are neutral following the post-results briefing as record high revenue per inpatient could be offset by a lower bed occupancy rate in the second half of calendar year 2025. —Sept 10, 2025
Main image: Bioppharma APAC
