KUALA LUMPUR (Sept 1): IHH Healthcare Bhd soared as much as 60 sen after the group announced it was acquiring a 73.4% stake in Ravindranath GE Medical Associates Pte Ltd (Global Hospitals) for INR12.84 billion (RM819 million) cash.
IHH (fundamental:1.65; valuation:0.5) rose to its highest so far today at RM6.45.
At 10:35am, IHH pared gains at RM6.03, with 3.64 million shares traded. At RM6.03, IHH had a market capitalisation of RM49.57 billion.
Hong Leong Investment Bank Bhd wrote in a note today that the Global Hospitals acquisition would enable IHH to have a stronger foothold in the Indian healthcare market.
But the acquisition is expected to have short-term drag on IHH's earnings, according to Hong Leong.
“We maintain sell with unchanged sum of parts-derived target price of RM4.51, as share price has run ahead of fundamentals,” said Hong Leong.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)