Tourist-focused Island Hospital will enhance IHH Healthcare’s attractiveness to higher-paying foreign patients: analysts

INTEGRATED healthcare provider IHH Healthcare’s RM3.9 billion (S$1.17 billion) acquisition of Penang’s Island Hospital will propel the group to a leading healthcare provider for medical tourists, doubling down on the flow of patients coming from nearby regions, said analysts.

They are largely positive due to longer-term earnings accretion, but note that the acquisition came at a premium valuation and the transaction is pending the finalisation of its funding structure.

Macquarie Capital research analyst Gan Huan Wen said that the 600-bed Island Hospital, which IHH acquired from private equity firm Affinity Equity Partners, is a top destination for medical tourists; in comparison, medical tourism revenue makes up just 5 to 6 per cent of IHH’s Malaysia revenue.