IHH: Healthcare Group Reports FY25 Earnings In-Line with Expectations, Maintains Positive Outlook and ‘BUY’ Rating

A leading healthcare group announced its financial results for fiscal year 2025 (FY25), reporting core net earnings that were broadly in line with analyst and consensus expectations. The company recorded MYR1.8bn in core net profit for FY25, an 8% increase year-on-year, driven by a robust performance in the final quarter of 2025.

Performance Review

For the fourth quarter of 2025 (4Q25), the group’s core PATAMI (profit after tax and minority interests) surged by 11% quarter-on-quarter and a significant 62% year-on-year, reaching MYR512m. This strong quarterly showing contributed to FY25 core earnings meeting 99% of the full-year forecast. While overall results were within expectations, performance varied across its key markets.

Operations in Malaysia and Acibadem (Turkey) delivered stronger-than-expected operating metrics sequentially. Malaysia demonstrated resilience with rising revenue intensity, while Acibadem saw a 15% surge in inpatient admissions following the July 2025 consolidation of Bayindir Healthcare. Conversely, Singapore and India segments experienced softer inpatient admissions and a contraction in their respective EBITDA margins, contributing to an overall group EBITDA margin dip to 21.4% for the quarter. The company’s Return on Equity (ROE), excluding extraordinary items and MFRS 129, stood at approximately 9% for FY25, with management targeting a double-digit ROE by FY28.

Future Outlook and Growth Drivers

The outlook for 2026 remains firmly intact, with the group anticipating low-to-mid teens constant currency growth in both revenue and EBITDA. This positive trajectory is expected to be fueled by several strategic drivers, including sustained structural growth from medical tourism, the ongoing shift towards daycare and ambulatory care centre (ACC) formats, and early signs of stabilization in Singapore despite prevailing payer pressures. Additionally, continued margin convergence in India’s operations is expected to contribute to growth. The investment bank maintains its favorable view on the group, citing strong execution, its reputable regional footprint, and a strategic focus on affluent clientele as key factors underpinning earnings resilience.

Key Risks

Potential downside risks identified in the report include weaker-than-expected economic growth, which could dampen patient volumes. Aggressive cost inflation across operating markets, potentially hindering the ability to pass through cost increases, and foreign exchange volatility leading to translation losses are also noted as concerns.