Singapore’s Big Winner of the Week: IHH Healthcare Bhd

Healthcare provider, IHH Healthcare Bhd (SGX: Q0F), gained 4.2% since last Friday to close at S$2.25 yesterday. The performance trumps that of the Straits Times Index (SGX: ^STI), as it moved in the opposite direction. This makes IHH the big winner in the local share market this week.

IHH Healthcare is the “second largest healthcare group in the world by market capitalisation”. It prides itself at being the leading player in Singapore, Malaysia and Turkey. Employing more than 25,000 people, it operates the Mount Elizabeth, Gleneagles, Pantai and Acibadem brands. It owns a 35.8% indirect stake in Parkway Life REIT (SGX: C2PU), as well.

In 2012, IHH’s initial public offering (IPO) became the first ever IPO to be listed on the Malaysia stock exchange and Singapore stock exchange concurrently. It was the world’s third largest IPO then, raising US$2 billion. Since listing, the price is up some 90%.

The firm released its first-quarter results on 28 May 2015. For the three months ended 31 March 2015, revenue grew 14% year‐on‐year to RM2.0b, while net profit increased 8% to RM171.5m.

The growth in the top line was mainly attributed to higher in-patient admissions and ramping up of operations in Turkey’s Acibadem Atakent Hospital and Malaysia’s Pantai Hospital Manjung. Both hospitals opened last year.

IHH Managing Director and Chief Executive Officer, Dr Tan See Leng, commented on the group’s performance. He said, “With another solid set of results behind us, we reaffirm the soundness of our differentiated strategy of expanding in high‐ growth markets while delivering organic growth and ramping up new hospitals quickly. We look forward to a strong pipeline of beds coming on‐stream this year and we will continue to extract operating leverage from our diversified operations.”

Going forward, a new cancer centre and a new hospital in Turkey will be completed in the coming months of the year. In Malaysia, expansion of Gleneagles Hospital Kuala Lumpur is expected to be done this year. Gleneagles Kota Kinabalu commenced operations this month, and will contribute to the total revenue as it ramps up its operations progressively. Meanwhile, in India, Continental Hospitals, which was acquired in March 2015, will contribute to the group from the second quarter onwards.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.