IHH Healthcare Berhad is exploring expansion opportunities in Indonesia and Vietnam, aiming to bolster its scale in response to rising healthcare costs across the region. Chief Executive Officer Prem Kumar Nair confirmed the group’s interest in both markets, citing healthcare reforms and regulatory easing in Indonesia and strong demand trends in Vietnam.
“Vietnam contributes significantly to our Singapore operations through medical tourism,” Prem Kumar noted during a recent interview in Kuala Lumpur.
IHH, Southeast Asia’s largest listed hospital operator by market capitalisation at US$14 billion, currently manages more than 80 hospitals across 10 countries, including Singapore, India and China. The group has maintained an aggressive growth trajectory, most recently acquiring Malaysia’s Island Hospital Sdn Bhd in 2024. Its affiliates, Acibadem in Turkey and Fortis Healthcare in India, also completed acquisitions in their respective markets over the past two years.
The group’s regional expansion strategy is designed to mitigate the impact of rising import costs for medical equipment and consumables. To manage cost pressures, IHH is centralising procurement of generic medication and key medical supplies, enabling greater purchasing efficiency.
In China, the company has consolidated its clinic operations into a profitable unit and is seeing an increase in patient numbers at its Shanghai hospital. However, despite recent policy shifts allowing greater foreign participation in China’s healthcare sector, IHH remains cautious about further expansion in the market.
“In China, the public sector remains a dominant force. We are the only foreign operator with an integrated ecosystem of clinics and hospitals, and our focus will be on strengthening that model,” said Prem Kumar.
Domestically and regionally, IHH is investing to expand its hospital bed capacity by 33% between 2024 and 2028, targeting a total of 4,000 additional beds. The group is also placing increasing emphasis on out-of-hospital care, including ambulatory surgical centres, primary care clinics and other healthcare facilities, with 60 non-hospital facilities already in operation.
“Relying solely on hospitals is not sustainable. Out-of-hospital services are essential for managing long-term cost pressures,” said Prem Kumar. “Singapore has already adopted this approach, and Hong Kong is moving in that direction.”
India is expected to become a key growth driver for IHH, which already operates 35 hospitals in the country – the group’s largest in-market footprint. While Singapore, Turkey and Malaysia currently account for the bulk of IHH’s revenue, India’s expanding private healthcare demand is positioning it as a future core market.
Financially, IHH reported RM6.29 billion (US$1.48 billion) in revenue for the first quarter, up 5.7% year-on-year. Net profit, however, declined by 33% to RM514 million due to exceptional accounting adjustments.
In Malaysia, where the company is headquartered, regulatory constraints prevent hospital operators from managing other healthcare facilities. IHH intends to engage with the Ministry of Health to advocate for policy changes, enabling broader participation in the out-of-hospital care segment.
“We see significant potential in Malaysia’s out-of-hospital sector and are prepared to invest heavily, should the regulatory environment permit,” Prem Kumar added.
Despite these growth initiatives, IHH shares have declined 8.4% year-to-date, compared with a 7% drop in Malaysia’s benchmark stock index amid broader concerns over US trade tariffs.
-Bloomberg
