IHH Healthcare - Taking its healing touch to HK

IHH is adding Hong Kong to its extensive global network. We are not surprised by its winning bid to acquire a site on which it will construct, develop and operate a private hospital in Hong Kong. This reinforces IHH’s status of a premier Asian healthcare play. This development does not alter our numbers as we have factored in various landmark hospitals in its pipeline for the next few years. We retain our Outperform rating and SOP target price. Potential catalysts are a ramp-up of Novena Hospital's operation and revenue intensity in all its three markets, and possible asset recycling to fund this new HK hospital.