Hong Leong, RHB and UOB Kay Hian upgrade IHH to ‘buy’ after earnings beat estimates

[SINGAPORE] Analysts at the research houses of Hong Leong Bank, RHB and UOB Kay Hian have upgraded previous neutral ratings on integrated healthcare group IHH Healthcare to “buy”, after it posted stronger-than-expected second-quarter results.

IHH posted on Thursday (Aug 27) a 29.3 per cent rise in net profit to RM573 million (S$181 million) for the second quarter ended Jun 30, 2026, from RM443 million for the same period the previous year.

This beat Bloomberg consensus estimates of RM487.4 million in net profit; earnings per share of RM0.0648 also surpassed the consensus RM0.05875 estimate.

Revenue for the second quarter rose 11.9 per cent to RM7.05 billion from a year earlier.

For the first half of 2026, net profit rose 15 per cent year on year to RM1.1 billion, from RM957 million.

Hong Leong Investment Bank analyst Chee Kok Siang noted in a research report on Friday that IHH’s H1 core earnings had come in ahead of estimates for the full year.

The bank cited stronger profit margins in IHH’s Malaysia operations following cost optimisation measures, and higher revenues in its operations in Turkey as key positives.

This stronger performance, along with a recent correction in the group’s share price, “could help rekindle market interest in the stock”, said Chee.

IHH, which is dual-listed in both Singapore and Malaysia, has seen its share price on Bursa Malaysia fall by 9.2 per cent over a three-month period, though it remains 20 per cent higher than its level a year ago, Nomura noted in a Thursday report.

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Chee raised Hong Leong’s target price for the healthcare group to RM9.10, from RM9 previously.

Meanwhile, RHB upgraded the stock to “buy” from “neutral” at a target price of RM9.54. UOB Kay Hian’s Philip Ching also raised his recommendation on the stock to “buy”, with a target price of RM9.25.

Among analysts tracked by Bloomberg, 24 have a “buy” rating on IHH; three rate it “hold”, with no “sell” calls. The 12-month consensus target price stands at RM10.23.

RHB raised its FY2026 to FY2028 earnings forecasts for the group by 7 to 8 per cent, adding that these were based entirely on higher earnings assumptions for its Turkish operations.

Q2 revenue from Acibadem Healthcare Group, IHH’s Turkish hospital business in which it owns a 90 per cent stake, rose 20 per cent. RHB noted that this was driven by a rise in admissions of about 15 per cent and a 22 per cent surge in case intensity.

Hong Leong’s Chee said that revenues in Malaysia are likely to strengthen seasonally with a stronger mix of elective surgeries, particularly in Q4. Meanwhile, the group’s expansion in India through Fortis is expected to boost its performance in H2.

Q2 revenue from IHH’s Singapore portfolio declined 9.7 per cent from the year-ago period, but analysts remained optimistic on the segment’s outlook.

Chee noted that bed occupancy rates in Singapore rose to 55 per cent in July, from 51 per cent in Q2 and 49 per cent in Q1. He added that the ramp-up of Mount Elizabeth Hospital in Orchard is expected to support revenue and earnings.

RHB said that concerns over the group’s Singapore portfolio have been “largely priced in” as bed occupancy rates recover.

Kenanga Investment Bank, however, remained more cautious on the company’s valuation.

Analyst Raymond Choo said in a Friday report that the company’s fundamentals are “already reflected in its share price”, while its H1 results had met the broker’s expectations.

He maintained the bank’s target price for the group at RM8.50, holding his recommendation for the stock at “market perform”.

Shares of IHH on the Singapore Exchange rose 0.8 per cent or S$0.02 to close at S$2.67 on Friday.