By Yantoultra Ngui
SINGAPORE (Reuters) – IHH Healthcare, an operator of private hospitals in Asia, is looking for acquisitions in new markets such as Indonesia and Vietnam, its top executive said.
It is also looking to expand in markets where it already has a presence such as India and Turkey, and to turn around underperforming assets in China.
“There are some very good healthcare markets like Indonesia, Vietnam is another,” said Prem Kumar Nair, speaking to Reuters in his first media interview since taking over as IHH Group’s chief executive in October.
“I look at it from the viewpoint of where some of our foreign patients are coming from. These are very strong markets for us,” added Nair, a physician and healthcare executive with over three decades of experience in the sector.
IHH is in the midst of reviewing its strategy for China where its operations are currently loss-making.
“China is a market where I feel we’ve got to play the long game because it’s a huge market. There will be some ups and downs but we’ve got to stay the course,” he said.
He added that long term, IHH saw growing opportunities in China, the world’s second most populous country, as its population becomes more affluent and demand for private healthcare grows.
IHH is aiming to grow organically by adding another 4,000 new beds across Malaysia, India, Hong Kong, Turkey and Europe in the next five years, Nair also said. The company currently has more than 12,000 beds.
Listed in both Singapore and Malaysia since 2012, IHH has operations in 10 countries with 83 hospitals and over 65,000 staff, according to its website.
It had a market cap of some $11 billion as of Friday, the fourth-biggest among healthcare companies in Asia Pacific excluding Japan, LSEG data showed.
Its third-quarter net profit more than doubled to 532.1 million ringgit from a year ago, boosted mainly by higher patient volumes.
Competition in the sector is, however, intensifying and companies and investors have snapped up healthcare assets, betting on increasing demand and the sector’s ability to weather tough economic conditions.
Smaller peer Columbia Asia, a Southeast Asian-focused healthcare company backed by alternative asset firm TPG, in November bought Ramsay Sime Darby Health Care for 5.7 billion ringgit.
Singapore’s Thomson Medical in July agreed to acquire Far East Medical Vietnam from healthcare buyout firm Quadria Capital for $381 million.
“We are happy that there’s competition because it just shows that we are in the right healthcare market,” Nair said. “We won’t want to overpay for assets. We will pay what’s right, what’s accretive, what fits into our expansion plan.”
($1 = 4.6770 ringgit)
(Reporting by Yantoultra Ngui; Editing by Edwina Gibbs)
