• FY14 core met, at 96% of our FY14E.

• Ramp-up of hospital openings in recent years & new beds to spur growth.

• Maintain HOLD as positives priced in. SOTP TP raised to MYR5.21, from MYR4.82, to reflect higher ratings enjoyed by peers.

Operations improved 4Q14 revenue grew 9% YoY. Core profit grew 23% YoY, on better EBITDA margins and lower interest expenses. Patient volume and average revenue per patient in Singapore, Malaysia and Turkey, its bread-and-butter markets, grew YoY. QoQ, Singapore’s patient volume dipped 3% due to exceptionally high visits in 3Q14.

New hospitals ramping up Two new hospitals started in 2014 have improved. Acibadem Atakent in Turkey turned in MYR8m EBITDA in 4Q14, vs MYR5.6m losses a year ago. Pantai Hospital Manjung in Malaysia cut its EBITDA losses by MYR1.1m. Three hospitals opened in 2012 continued to step up their operations and margins. EBITDA from Mount Elizabeth Novena in Singapore was up 103% YoY in 4Q14. Some 682 new beds should be added in FY15E, on top of expansion of existing hospitals to adjacent space.

Nevertheless, maintain HOLD as we believe its positives are in the price. IHH trades at 49x FY15E EPS vs peers’ average 40x. We raise our SOTP TP to MYR5.21 from MYR4.82. We now ascribe a higher EV/EBITDA multiple of 22x, from 21x, to FY15 EBITDA. This is to be consistent with peers’ average which has been re-rated.

Source: Maybank Research - 2 Mar 2015