A reasonable start

+ 1Q13 in line, forms 18% of FY13F earnings 

+ EBITDA margins weaker on start up costs of new hospital and other operating costs - within expectations 
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+ Novena losses continue to narrow with breakeven expected in FY13 

+ Maintain HOLD, TP revised to S$1.55

1Q13 within expectations. 1Q core net profit (excl. exceptional items) of RM133.5m was 17% higher than a year earlier, accounting for c.18% of our FY13F earnings. Revenue and EBITDA grew by 29% and 24% to RM1.6bn and RM347.6m respectively, partly driven by a full quarter of Acibadem’s consolidation in 1Q13, compared to only two months a year earlier. In addition, the Group also saw revenue growth from existing operations and contribution from new hospitals.

IHH Healthcare more upside to come after strong bullish break

Key obstacle conquered. IHH Healthcare is poised to see further recovery after initiating a strong bullish break out of its 5-month horizontal trading range and above its $1.32 key resistance to a new all-time high on significant volume in the last session.

Indicator is bullish. The MACD is climbing steadily at the moment; this suggests that the upside momentum is building up.

Next resistance at $1.40. The counter is likely to head higher towards the next key obstacle at $1.40 (key psychological obstacle) in the weeks ahead.

Immediate support at $1.32. Meanwhile, we advocate a stop-loss exit around