Malaysia’s benchmark index retreated as profit-taking in key heavyweights weighed on sentiment, while overall market activity remained active. Summary FBM KLCI fell 0.83% to 1,684.93 , dragged by losses in banking and selected large-cap names, despite steady trading participation. Market Performance FBM KLCI : 1,684.93 (-0.83%) FBM Mid 70: -0.00% (flat) FBM Small Cap: -0.23% FBM ACE: +0.20% Broad market was mixed , with weakness concentrated in large caps. Market Breadth & Trading Activity Total volume: 3.54 billion shares Total value: RM4.19 billion Gainers: 456 Losers: 678 Unchanged: 550 Market breadth turned negative , reflecting cautious sentiment. Top Movers – KLCI Gainers Axiata (6888.MY) +1.54% Petronas Gas (6033.MY) +1.18% Sunway (5211.MY) +1.15% Losers Hong Leong Bank (5819.MY) -3.29% Maybank (1155.MY) -3.02% CIMB (1023.MY) -2.47% Banking sector weakness was the main ...
Maintain neutral call with lower target price (TP) of RM6.08
IHH’s 3QFY16 revenue was RM2.44bn (+18.3% YoY), while its 9MFY16 stood at RM7.4bn (+20.0% YoY). Excluding exceptional items, IHH’s 3QFY16 core net profit increased 73.2% YoY, bringing its YTD core net profit to RM643.5m (+9.5% YoY), below our and consensus’ estimates, accounting for 60.7% and 65.1% of full year estimates respectively. The Group expects the pre-operating and start-up costs of new operations to partially erode its profitability during the initial stages. In addition, staff cost is expected to rise due to increased competition from trained healthcare personnel. As such, we adjust our cost accordingly and cut our earnings estimates by 13%-23% for FY16-18F and maintain our Neutral call on IHH with a lower TP of RM6.08 (previously RM7.02), premised on our FY17 blended EV/EBITDA.
- Parkway Pantai’s (PPL) revenue was higher by 19.6% YoY to RM1.54bn for 3QFY16, while EBITDA increased 14.2% YoY to RM354.4m, on the back of continuous ramp up of its Mount Elizabeth Novena Hospital in Singapore as well as contribution from its newly opened hospitals and acquisitions made in 2015. On operations, number of inpatient admissions in Singapore and Malaysia increased by 13.6% and 9.0% respectively. Its revenue per inpatient admissions in Singapore declined by 3.0%, while Malaysia increased by 10.2%. Its earnings was partially eroded by higher operating expenses and staff cost, start-up losses of RM2.3m from its new hospitals in Malaysia as well as pre-opening expenses of RM19.7m incurred for its coming Gleneagles Hong Kong.
- Acibadem’s revenue increased to RM808.7m (+17.8% YoY) in 3QFY16, while EBITDA declined by 10.3% YoY, on the back of higher staff costs as well as operating costs and rental expenses due to further depreciation of Turkish Lira (TL) against USD. EBITDA QoQ declined by 47.5% due to lower revenue and patient volumes during the summer months and long period of holidays to celebrate Eid festivities. Overall, Acibadem’s inpatient admissions jump by 47.9% YoY, mainly contributed by Acibadem City Group. Nevertheless, its revenue per inpatient declined by 9.7% YoY.
- Project progress. The latest project to be completed will be Gleneagles Hong Kong and Acibadem Altunizade in Istanbul, which is expected to complete in the 1st half of 2017. While Acibadem Atasehir in Istanbul, Pantai Hospital Kuala Lumpur and Gleneagles Medini, are all targeted to complete by end-2017 (Table 2)
Source: PublicInvest Research - 25 November 2016
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