PETALING JAYA: IHH Healthcare Bhd is likely to see lower quarter-on-quarter earnings for its third quarter financial year ended Sept 30, 2021 (Q3FY’21) although the bottom line for the quarter should be higher year-on-year, says AmInvestment Bank Research.
The research unit said IHH Laboratory is expected to see lower revenue in Q3FY’21 due to lower Covid-19 tests, as Covid-19 daily new cases in India have eased to 20,000 cases in September from the peak of 400,000 cases in May.
“Although the number of elective surgeries may increase in Q3FY’21, we expect that these would not be enough to offset the impact the lower earnings from laboratory tests,” said AmInvestment Bank Research in its latest report.
The research unit is also positive on IHH Healthcare’s venture into digital healthcare, and opined that this should lead to better operating efficiency and improved patient experience.
“For example, hypertension patients can reduce their frequency of visits to hospitals by submitting their blood pressure data (taken at home) periodically to the hospitals.
“Operationally, doctors will be able to focus their time on more serious cases,” said AmInvestment Bank Research.
Also, digital healthcare areas with potential opportunities include doctor’s appointment and drug delivery.
IHH Healthcare launched its telemedicine services in May 2020, and has allocated US$100mil (RM418mil) to develop its digital healthcare capabilities in the next three years.
AmInvestment Bank Research also noted that in March last year, IHH Healthcare had invested in a minority stake in telehealth startup Doctor Anywhere (DA).
DA is based in Singapore and offers on-demand healthcare solutions through a digital platform.
It aims to provide quick access to health and wellness solutions.
In early September, IHH Healthcare made a follow-on investment as part of DA’s Series C fundraising.
AmInvestment Bank Research maintained its “hold” call on IHH Healthcare with an unchanged fair value of RM6.29 after using discounted cash flow to value the group with weighted average cost of capital of 7% and terminal growth rate of 3.5%.
Incorporated in its fair value is a 3% premium for its environmental, social and governance rating of four stars for the group.