Hospital operator IHH eyes Indonesia, Vietnam for expansion

[KUALA LUMPUR] IHH Healthcare is looking to potential new markets Indonesia and Vietnam as the Malaysian hospital operator continues building scale to offset rising healthcare costs in the region.

Indonesia is attractive, thanks to its healthcare reforms and foreign ownership relaxation, while Vietnam has emerged as a booming market, according to chief executive officer Prem Kumar Nair.

“We get a lot of patients from Vietnam into our Singapore operations,” he said in an interview in Kuala Lumpur this week.

The company currently operates more than 80 hospitals in 10 countries, including Singapore, India and China, and has been actively acquiring healthcare facilities in recent years. It bought Island Hospital in Malaysia in 2024. Its Turkish unit Acibadem and Indian affiliate Fortis Healthcare also purchased hospitals in their respective markets in the last two years.

The company has US$14 billion in market capitalisation and is the most valuable listed hospital operator in South-east Asia. The desire to widen expansion in the region comes as IHH looks to make up for rising import costs in the industry. The group is now procuring medical equipment, consumables and generic medications in bulk to cut costs on imported items, Prem Kumar said.

IHH is also planning to consolidate its presence in China, according to Prem Kumar. It turned its clinic business into a profitable operation and is seeing a rising number of patients at its hospital in Shanghai. Still, China’s decision to ease restrictions on foreign investment in the healthcare sector will not immediately sway IHH into expanding further in the world’s second-largest economy.

“In China, the public sector is a very big competitor to private healthcare,” he said. “We are the only foreign operator in China who has a combination of clinics, and an ecosystem, so we will build on it.”

The company’s priorities also include tapping growing opportunities in existing markets, where it’s already committed to expanding hospital bed capacity by 33 per cent from 2024 to 2028, a 4,000 bed target.

“There’s no dearth of opportunities in the countries we operate,” he said.

Beyond hospitals

IHH booked RM6.3 billion (S$1.9 billion) in first-quarter revenue, an increase of 5.7 per cent from a year ago. Its profit slid 33 per cent to RM514 million, which the company attributed to exceptional accounting adjustments.

Singapore, Turkey and Malaysia are currently its main revenue drivers, but the company expects India to become a major contributor in the coming years amid booming demand for private healthcare. With 35 hospitals, India already has IHH’s biggest in-country network.

Prem Kumar said he was focused on growing out-of-hospital care in IHH’s markets, including ambulatory surgical and care centers, along with primary care centres, along with primary care centres, to help control cost pressures. The group currently operates 60 healthcare facilities that are not hospitals.

“If we depend on hospitals alone, healthcare costs are going to rise tremendously,” he said.

Singapore already has such an ecosystem in place while Hong Kong is headed in that direction, Prem Kumar said. Still, its home market of Malaysia does not allow hospital operators to also run other healthcare facilities.

IHH plans to make representations to Malaysia’s Health Ministry in hopes the rule will be changed. “We definitely want to move, in Malaysia, into the out-of-hospital sector in a big way as well,” he said.

IHH shares have declined 8.4 per cent so far this year, while Malaysia’s benchmark stock index has fallen around 7 per cent amid concerns over US tariffs. BLOOMBERG