IHH Healthcare

IHH Healthcare: CIMB downgrades to Neutral with TP $1.72. Note that IHH’s stock has done very well since its IPO in Aug 12. It is now the most expensive stock to own among ASEAN hospital stocks (aside from Siloam International), even if we take into account its most extensive footprint. IHH has so far executed well in all its new markets, thanks to its vast experience accumulated over two decades. However, believe that there are difficulties from operating a larger and more complex organisation following its rapid addition of new hospitals and healthcare businesses. Though IHH should continue to benefit from growing private-healthcare consumption and revenue intensity in all its three markets, improving entry points and fundamentals for its regional peers may provide investors with better short- to mid-term returns. As such, the house downgrades IHH to Neutral from Outperform, advocating a switch to BGH and RFMD.