IHH Healthcare Share Prices Rise On Acquisition Move
KUALA LUMPUR, Oct 20 (Bernama) -- Shares prices of IHH Healthcare Bhd rose on Tuesday on its acquisition of Afiniti Wellness in Medini, Iskandar Puteri, Johor.
At lunch break, IHH Healthcare advanced seven sen to RM7.97, with 227,200 units traded.
IHH Healthcare’s, operating through its subsidiary Pantai Medical Centre Sdn Bhd (PMC), has acquired Afiniti Wellness and established the foundation for a master-planned 18-acre integrated healthcare campus tied directly to the growth of Gleneagles Hospital Johor (GHJ).
The campus is expected to provide additional inpatient beds (350 combined) upon completion, with an expected future addition of a 150-bed inpatient block specifically for advanced tertiary and quaternary care.
MBSB Investment Bank said that by transferring low-acuity, outpatient and day-case services to the new dedicated Ambulatory Care Centre (ACC), GHJ frees up valuable bed capacity and clinical bandwidth within its main building.
The investment bank noted that the announcement did not disclose the value of the transaction but comparatively, regional healthcare hubs similar in operational structure to the Afiniti Wellness, the average daycare outpatient volume growth is 15 per cent to 25 per cent higher, while complex inpatient cases yield approximately five times higher in revenue per admission.
“Given these increments, we opine that, should the acquired facility mature and fully integrates with GHJ, we expect an expansion of EBITDA margin up to 26-28 per cent. This is on the basis that ACCs carry lower operational overhead due to lesser staffing and overnight room upkeep needed, and inpatient bed mix is optimized toward high-margin complex tertiary surgeries,” it added.
In near-term (12-18) months, MBSB Investment Bank said it did not expect additional earnings, considering that the integration could minorly add into retrofitting cost and initial setups.
“However, in the medium term (24-36 months), we anticipate revenue growth in IHH’s high-margin segments as the acquired ACC becomes fully operational,” it added.
However, MBSB Investment Bank noted the real issue that could potentially impact the acquisition negatively was the brain drain of medical staff, which had been a persistent problem within the global healthcare sector.
“Scaling up to a 350-bed (and potentially 500-bed) campus requires recruiting and retaining high volumes of skilled clinical staff. In Malaysia, nursing staff, allied health personnel and junior doctors frequently migrate to Singapore for higher compensation.
“Additionally, private healthcare expansion across Iskandar Malaysia intensifies competition for top-tier consultants,” it added.
The investment bank said there was also the downside risk of regulatory delays, considering that moving surgical procedures and operating theaters into a separate ACC structure requires distinct Ministry of Health’s licences, approval processes and compliance under the Private Healthcare Facilities and Services Act (PHFSA).
“This also extends into cross-campus logistics, pertaining patient record integration and emergency transfer protocols between the main hospital block and the separate ACC. While these could impact operational efficiency, we opine they would not be a long-term interference,” it added.
-- BERNAMA