06 July 2012
Public Investment Research: Fair value for IHH Healthcare Bhd at RM 2.98, high expectations of IHH’s future growth have been reflected in its offer price, making it one of the most expensive healthcare stocks in the world
Public Investment Research started world’s second largest healthcare company IHH Healthcare Bhd with a fair value of RM2.98 (US$0.94)per share, some 4.6 per cent higher than its IPO price of RM2.85.
“Although we expect to see sustained trading interest in the stock in the short term, there is limited upside for IHH’s fair value, with significant downside risk should the company fail to deliver the expected results,” Public Investment said in a note.
The research house said high expectations of IHH’s future growth have been reflected in its offer price, making it one of the most expensive healthcare stocks in the world.
Public Investment said it was cautious on IHH’s plans to synergise its operations across Malaysia and Singapore to Turkey due to the massive size and complexity of the group.
Also, healthcare costs are very specific to these countries.
Reuters reported yesterday that IHH’s global institutional offer, which makes up 6 per cent of its US$2 billion initial share sale has been oversubscribed nearly 60 times at the higher end of the bookbuilding range between RM2.67 and RM2.85 per share. -- Reuters