IHH is reevaluating its China operations: report

The hospital wants referrals across primary, outpatient, and inpatient care.

IHH Healthcare said it is reevaluating its strategy to run its China operations, which include two hospitals and four clinics in Shanghai, as an ecosystem with referrals across primary care, outpatient and inpatient care that could lead to a turnaround of its business.

In a brokerage report, CGS-CIMB said this is a shift from its plans to divest its China operations previously, and would likely lead to drawn-out gestational losses, albeit with a minimal impact on the group as a whole.

Amongst its downside risks is "margin compression from rising inflation, as well as outsized losses of its gestating
assets, especially with management’s rethinking of its divestment plans in China."

For its bed expansion, IHH is also looking to increase its ambulatory care offerings and improve primary care penetration.

"IHH has opened its first ambulatory care facilities: Parkway MediCentre in Singapore, and Wong Chuk Hang clinic in Hong Kong, allowing IHH to decant lower urgency cases out of its hospital to make way for higher revenue intensity treatments, which we think could help drive better profitability across the two countries," said CGS-CIMB.