KUALA LUMPUR: IHH Healthcare Bhd's expansion plans across its key markets is timely, supported by strong traction in its medical tourism division, said RHB Research.
The firm maintained its "Buy" call on the stock with a target price of RM7.50, representing a 22 per cent upside, after it came away from IHH Healthcare's post-result briefing feeling upbeat.
It said the company's acquisition of Timberland Medical Centre (TMC) in Kuching has been completed and will be consolidated to the group in March.
"IHH's key emphasis for Malaysia will be strengthening its local presence, which will keep its nurse retention rate in check.
"While nursing shortage concerns appear to have subsided, IHH Healthcare Singapore intends to review its remuneration package for its nursing staff following the recent public nurses retention scheme announced by the Singapore government," it noted.
The company's focus for Turkey is to expand its current regions in Europe such as Bulgaria and Macedonia, Serbia and Netherlands, and to grow its foreign patient visits to Turkey to reduce the impact of hyperinflation.
Its medical tourism saw strong traction as evidenced by its robust foreign patient footfalls.
The medical tourism segments in IHH's Singapore, Turkey, India and Malaysia operations accounted for 21 per cent, 18 per cent, seven per cent and six per cent of revenues in 2023 versus pre-pandemic percentages of 25 per cent, 16 per cent, 10 per cent and five per cent respectively.
Meanwhile, India's Supreme Court has urged the government to establish a regulated fee structure for patients, in a recent response to a public interest litigation filed by a non-profit organisation (NGO).
The ultimate objective of the NGO is to bring down the cost of healthcare in the private sector to the level of rates under the Central Government Health Scheme.
"Given the complexity of implementing this as well as the risk of jeopardising the quality of private healthcare in India, we are of the view that the standardised fee structure is unlikely to take place in the near term, despite the act being in place since 2012," RHB Research said.