IHH Healthcare

IHH Healthcare: Daiwa upgrading IHH to ADD with a higher target price of RM5.50 mainly on upward revisions to our earnings. The upgrade is on the back of capacity expansion at its Malaysia and Turkey operations, which are expected to register 25% and 32% increase in bed capacity by end-15 respectively, also to reflect improving margins on operating leverage. TP is based on a revised 22x 2015E EV/EBITDA (30% premium to regional peers). Believe the premium is justifiable given its premium offering and significant market capitalisation (50% larger than Bangkok Dusit). Over the past 6 months, the valuationgap between regional peers and IHH has narrowed. Overall, view IHH as a long term value play with strong fundamentals given the group’s extensive regional network.