Ladies and gentlemen, good morning, and welcome to the second quarter, 2024 financial results of IHH Healthcare analyst briefing conference call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session, at which time, if you wish to make a question, you need to press star one one on your telephone keypad. I must advise you that this conference is being recorded today, 13th of August, 2024. I would now like to hand the conference over to our first speaker today, Ms. Penelope Koh, from Investor Relations of IHH. Please go ahead, Ms. Koh. Thank you. Good morning, and thank you for joining us this morning. I do apologize for the slight delay that we had experienced this morning due to some technical issues. But anyway, we're happy to now be able to start the webcast and the results briefing. So again, welcome to joining us for our second quarter, 2024 results briefing, whereby we're doing it via a live video broadcast, and it's also available on our webcast. So with me today are Dr. Prem Nair, which is our Group Chief Executive Officer, and Mr. Dilip Kadambi, our Group Chief Financial Officer, and Mr. Ashok Pandit, our Group Chief Corporate Officer. The results materials are also available for download on our IHH website. So we'll begin with an opening address by our Group CEO, Dr. Prem. Our Group CFO, Dilip, will present the financial highlights. We're offering a clear view of our financial status and core operating performance. And following that, Dr. Prem will give us an update on operations across our markets and conclude with a brief outlook. And then we'll move on into our Q&A to address the specific questions. So with that, I'll turn the call over to Dr. Prem. Dr. Prem, please. Thank you, Penny. Very good morning, and thank you for joining this early call. It's been another remarkable quarter. The outstanding performance is a clear reflection of the continued strength of our core businesses and shows that our growth strategy is intact. Also, the team's commitment to execute on the strategic priorities, which we have already outlined previously. So I'll dive right into the Q2 results and share my thoughts on the three main takeaways on the business performance and our outlook. First, our strong growth momentum continues into Q2, 2024, surpassing our previous quarter's revenue with a record MYR 6.1 billion. Revenue, EBITDA, and PATMI ex EI all grew by double digits. Revenue intensity continues to improve from taking on higher acuity treatments. On the back of our strong performance, I'm happy to share that we have declared an interim dividend of MYR 0.045 per share for the period ending 31st December 2024, which will be paid out on 30th October 2024. This is MYR 0.01 higher than our interim dividend declared last year. Second, our hospital occupancy across the group stands at 70%, reflecting the strong demand for our services. In keeping with our second strategic priority of extending the continuum of care, we recently broke ground on IHH Singapore's first transitional care facility called TCF@ East. This venture brings us out of our traditional strengths in primary and quaternary care and into new and less familiar step-down care landscape. The 200-bed step-down care facility is expected to begin admitting its first patients from January 2025. To reinforce our strong position as Asia's leading center of excellence for cancer care, Fortis Memorial Research Institute in India launched the Gamma Knife Esprit treatment for brain tumors, the first in South Asia to offer this. And third, we will work on extending our leading position in the private healthcare space, driven by our clinical excellence and healthcare leadership. For example, we are organizing our IHH Quality Summit in India next month, whereby as a group, we've embarked on a journey to improve clinical outcomes and enhance patient experience. Our wide-ranging initiatives include the introduction of clinical quality indicators, investing in new medical technologies, conducting service training, and much more. For our shareholders and investors, we remain focused on executing our growth strategy, aligned with the ACE framework, to deliver value and healthy returns to our stakeholders. With that, let me hand over to our Group CFO, Dilip, to take you through our financials. Thank you, Dr. Prem. On this slide, we have two sets of numbers. The one on top is our reported numbers, and the one below, in the blue box, is the core operating performance, as we have always represented in the past. As you can see, we've had double-digit strong growth across all our key metrics, revenue, EBITDA, as well as PATMI ex EI. We've also, as you can see, highlighting the blue box, as I mentioned previously, because the blue box represents our performance, excluding MFRS 129, wherein we do have certain non-cash items in MFRS 129. On the next page, this represents our year-to-date numbers. And again, as you can see, strong results across all our key metrics. With regards to PATMI, on a year-to-date basis, there is a one-off item because of which it is lower this first half, and that is mainly due to the sale of IMU that happened the first quarter of last year. On the next page, if you look at our performance across all our key BUs, you can see double-digit revenue and also double-digit EBITDA growth. This is mainly driven by strong volume, as well as higher intensity across all our key markets. The same is the case on a year-to-date basis as well. You can see double-digit growth in revenues, as well as EBITDA across most of our key markets, again, driven by strong revenues and intensity. I would like to highlight and focus on the violet line on top. Our EBITDA margin stands at 23% for the quarter, and it is within the guidance we'd previously given of 22%-24%, that we mentioned previously. We also would like to highlight that our PATMI ex EI margin stands at 9%, and which is 100 basis points higher than the same quarter last year. Again, from a dollar perspective, we've had very strong EBITDA, as well as PATMI growth, at about 34% and 39%, respectively. As always, the cash generation has been very strong from our operations, and as highlighted previously, the cash generation that we generate currently would more than take care of our greenfield, you know, expansion plan that we've highlighted in our previous analyst meetings. With that, I'll probably hand back to Dr. Prem to take us through the operational performance of the company. Thanks, Dilip. For our operational highlights, let's start with Malaysia. Revenue grew 15%, you can refer to the slide, with higher revenue intensity recorded from taking on more complex cases, as well as higher local patient growth. There was also a strong growth in the foreign patient segment, primarily due to a rise in Indonesian medical travelers into Malaysia. Commendable quarter-to-date and year-to-date medical tourism revenue growth of 50%. EBITDA margins are very stable at 25%, and occupancy was at 69%. Revenue intensity grew 7%. Moving forward, we will focus on extending our leadership position in Malaysia, and we will do so by growing our capacity organically. We are adding almost 50% more beds over the next five years, and by exploring earnings accretive inorganic opportunities and undertaking tactical acquisitions, such as with Timberland Medical Centre in Sarawak. Just some highlights that you can see on the slide here. Gleneagles KL is expanding. By 2027, the new medical block with 260 beds will be ready, making GKL one of the largest private hospitals in Malaysia. We have a new ward in Pantai KL that sets a new standard in patient care, and we are expanding our reach to tap into the growing demand from medical tourism, predominantly attracting patients from Indonesia. Next is Singapore, and revenue increased by 16%, mainly on higher revenue intensity. Singapore continues to deliver on higher intensity cases from surgical disciplines such as orthopedics, cardiology, and gastroenterology. We saw strong EBITDA growth in Q2. EBITDA margins at more than 30%. Occupancy increased from a year ago to 66% with higher utilization. Despite Mount Elizabeth Orchard Hospital renovation that resulted in lesser beds, we increased patient admission, and because we are fully staffed, we were able to support the additional admissions, so the emphasis for Singapore is quite clear. It'll be about clinical leadership and especially oncology, with our very comprehensive suite of cancer treatments. This slide shows you some of the recent operational highlights. I mentioned TCF East, which is part of Singapore's out-of-hospital strategy. This facility will feature two hundred beds, as well as two refurbished buildings and a main ward wing. Now, let's go to Turkey and Europe, which relates to our Acıbadem business. Revenue and EBITDA grew 21% and 24%, respectively, on higher revenue intensity again, and improved performance across both new and existing hospitals. Our Turkish and European operations have done well and continue to contribute significantly to the group. Occupancy was at 70%, as the government had extended both Ramadan and Eid by almost two weeks, from the usual seven days to 20 days, and this was just announced prior to the breaks. It did impact our volumes a little bit as doctors and patients took off for the holidays. In Turkey, as you can see, there's some seasonality for this segment's earnings in Q2, but you know, as we always say, despite the macroeconomic challenges, Turkey, as one of our core markets, has demonstrated resilience and delivered growth, so we're very confident about it, the outlook, and Turkey has shifted back to conventional macroeconomic policies. The lira, against some of the major currencies, has stabilized since March 2024. But Acıbadem continues to diversify its currency risk via its European business, as well as with foreign patients traveling to Turkey for their treatment. So overall, non-lira revenue contribution is now making up around 40% of its top line. And some of the highlights shown here on Turkey, right? We are building Acıbadem Kartal Hospital. It's a greenfield project, which is opening in 2025, and in Europe, we'll open the 180-bed Acıbadem City Clinic in Bulgaria by end 2024. Over to India, where we have our twin engines of growth, Fortis and Gleneagles Hospitals. And no doubt, India continues to be a very exciting market for us. Revenue increased by 17%, while EBITDA increased by 34%. EBITDA margins stand at 16%, which is a 200 basis point improvement. Fortis, in particular, continues to deliver a strong performance, led by revenue growth in key specialty areas such as oncology, neurology, cardiac sciences, orthopedics, gastroenterology, and renal medicine. The robust growth in these key specialties has also led to a rise in ARPOB and increased occupancies. Revenue intensity increased 9%. So this slide shows you, some of the developments in India. So Fortis is making very, very significant progress on growth. It explores and assesses various growth opportunities that align with its cluster strategy. Fortis is also progressing well on its brownfield expansion plan for this year, and will be adding capacities across some of its key facilities, such as Faridabad, Anandapur, Shalimar Bagh, and Noida. At the same time, Fortis is focused on building up its high-growth specialty segments, such as oncology, neurosciences, and cardiac sciences, to help boost their earnings going forward. The. On this slide, I'd like to highlight, in particular, that FMRI in Delhi is the first in Southeast Asia to offer the Gamma Knife radiosurgery treatment that employs a non-surgical technology, very precise, to target brain tumors, both malignant and benign. Not forgetting Gleneagles Hospital, right, which did a major rebranding, right? It'll focus on brownfield expansion of close to 300 beds over the next few years. It's currently in the process of upgrading facilities and equipment to attract both doctors and patients. For Gleneagles Hong Kong, our operations there continue to ramp up well. We see steady growth with the capacity in the hospital to increase the number of beds. Revenue grew 22%, EBITDA increased 31%, margins 16%, up 100 basis points from a year ago. Occupancy was at 68%, and we are working towards our target for the hospital to be PATMI positive by early next year. You can see IHH Hong Kong on this slide, and just mentioned before, they're expanding across the healthcare continuum, largely like Singapore, due to the similar operating environment and regulatory environment. IHH China, I'm happy to report that we are now constructing a hub-and-spoke model in Shanghai, which includes building a seamless collaborating network, one tertiary hospital that we have there, Parkway Shanghai Hospital, and a single in-town ambulatory care center. This will enhance the referral mechanism and streamline front and back office functions as well to optimize operating efficiencies. In China, clearly, it will be focusing on outpatient growth, post-treatment follow-up care, referrals from ACC to PSH, and back. Also, happy to report that our clinics are now EBITDA breakeven. The ACC will really be a convenient one-stop, sort of hub for primary care, day case, day surgical cases, endoscopy, various specialties, rehab, health checkup, and aesthetics. All right. Let me go to the laboratories. Our lab segment, which saw a 9% increase in revenue from the previous year, so that reflects the stable growth of our laboratory business. EBITDA margins are at 20%. Test volumes saw a good 11% growth. EBITDA margin declined year on year due to some high expenses from Agilus rebranding, our Indian lab. So they did a rebranding, and had higher staff costs and high other operating expenses. But the plan, really, for IHH Laboratories is to grow into a large, data-driven lab across Asia. So they are growing organically. They're expanding across the healthcare continuum, moving higher up the technology ladder in areas such as genomics, precision medicine, molecular diagnostics. These are all things that will become very, very important in healthcare. And we are also aiming to establish reference labs in the region to support test menus beyond the usual regular tests. Some of the key highlights are here, as you can see. Maybe I can quickly summarize what has happened in this quarter. We carried over our robust growth momentum from the first quarter. Revenue, EBITDA, and PATMI ex EI all grew by double digits. We have declared an interim dividend of MYR 0.045 per share, which will be paid out on 30th October, 2024, and this is MYR 0.01 higher than our interim dividend declared last year. We remain confident of our trajectory, and we continue to extend our clinical and healthcare leadership across all our markets. So the focus for the rest of the year will remain on strengthening our market leadership, driving profitability, and sustaining healthy ROE, while maintaining prudent capital management and mitigating inflationary and interest rate pressures. So thank you very much. I'll now hand over the call to Penny for Q&A. Thank you. So, thank you, Dr. Prem. So before we start, we'll first take questions from the participants on the call before moving to the questions from the webcast participants. I would like to request for each participant to keep to two questions, and then thereafter, you can rejoin the queue again. So with that, operator, please proceed with the Q&A. Thank you. Thank you. As a reminder, to ask a question, please press star one one on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by as we compile the Q&A roster. Just a moment for our first question, please. First question comes from a line of Wee Kuang Tay from CGS International Securities, Singapore. Please go ahead. Hi, can you hear me? Hi, sorry, can you hear me? Can you speak louder? Just give me a moment. Is this better? Just go ahead. Hello. Okay, yeah. Thank you so much. Thank you for taking my questions, and congratulations on the record on revenue for this quarter. Just wanted to get an understanding on some of the seasonality factor that may have impacted India. Not sure how what, in terms of just quarter on quarter movements, the EBITDA margins trend that we see in India, that actually declined by about three percentage points. So, yeah, just trying to understand for India side. And secondly, just wanted to know on... I saw a mention of the PE fund for Agilus in India. May I know what's the plan for Agilus in terms of paring down stake by the PE fund itself? Do we have any timeline with regards to when this will be completed? Thank you. Yes. Yeah. Maybe I'll take the question on EBITDA. So if you look at, you know, our India business, there are a couple of things here. One, actually two things acting in tandem. One is, you know, you may recall that there was this big, you know, month-long election, the national elections that happened in India, which, you know, went across for almost a month and a half, and that obviously had an impact on volumes as well. So I think that's one reason. And the second reason is, there was a, you know, one-off right back in our IHH India results, last year, which, you know, isn't there this year. So both put together is the reason why we see a drop in, you know, the EBITDA margin. However, overall, if you look at, you know, both the entities on a standalone basis, Fortis has been regularly touching 20% + EBITDA and IHH, India as well, as we reported previously on an operational basis, are in the teens, you know, in terms of EBITDA margin. On Agilus, I think as we had mentioned in one of our previous discussions, there is an agreement between the private equity investors and Fortis, and Fortis has now received a put notice from the private equity investors. The board of Fortis will be evaluating options around that. And I think the course of action will be outlined over the course of the next few months. Thank you so much. Thank you. Just a moment for our next question, please. Next, we have Yang Wu from J.P. Morgan. Please go ahead. Hi, good morning, Dr. Prem and team. Congratulations on the double-digit growth. I have two questions. The first one is around medical tourism. I'm very pleased to hear, if I heard it correctly, it's a 50% growth, a five zero. But the question is around, with the ringgit strengthening in the recent months, how are you actually ensuring medical tourism growth continues? And also if there's any update on the Island Hospital bid, if you can share. The second question is around medical inflation. It has actually consistently outpaced general inflation, and actually in Malaysia, I think many insurance companies are repricing. Could you just elaborate on specific cost containment strategies on your side to safeguard margins? Really, any potential pushback from payers or patients as cost continues to rise there? Thanks. Okay, maybe the first question on medical travel. As you can see, as a whole, in all our countries, medical travel has grown significantly. Malaysia is a very attractive travel destination, and one of the reasons is really because the ringgit is very attractive for patients from Indonesia and other countries to come. The ringgit has strengthened somewhat, all right? But if you look in the grand scheme of things, all right, in terms of attractiveness, clinical competence, outcomes, accessibility, flights, all right, and the ringgit still being a very competitive sort of a currency, patients continue to come into Malaysia. Malaysia also facilitates medical tourism. They've got a national body, the MHTC, that also promotes Malaysian tourism. So we are quite bullish on medical travel in Malaysia, right? The other question that you asked was related to, Inflation. Inflation. Now, medical inflation consistently, not just now in a high inflationary environment, but medical inflation always is at a higher, always a higher trend than normal CPI, right? Simply because medical costs go up at a much higher rate. Manpower costs, as you all know, there's a worldwide nursing shortage. So manpower costs alone push up, the cost of healthcare, right? Plus, new technology, and that's also one of the reasons that pushes up, medical costs. For example, conventional surgery versus robotic surgery. You've seen in country like Singapore, we've got higher technology, machines, proton beam, and all coming in, so they will go up. Payers are becoming, a lot more, I would say, they're scrutinizing the bills and all that. But we feel it's our responsibility to deliver care at reasonable cost, and that's why we've got a very, very big value-based healthcare program. All right? I think we are one of the organizations that pushes value-based healthcare quite aggressively, all right, and we look at many procedures where things can be done with a shorter stay, right? Use of procurement. I would say we tend to procure our consumables and a lot of things, drugs, at, in large volumes, right? So we derive, I would say, quite a lot of benefits from that. So it's always an imperative for us to deliver care at reasonable costs, doing all these things. Yeah. Across, by the way, not just in Malaysia. Okay, just a quick follow-up on the medical tourism. Would you be able to provide the breakdown of the revenue contribution across the key markets, and also on the Penang Island Hospital, if you can share? Sure. So if you look at our second quarter, Singapore, as always, has been, you know, at about 19%-20% in terms of contribution of gross revenue from, you know, foreign patients. Mm-hmm. Malaysia, both domestic volumes as well as, foreign volumes, have grown very robustly, and hence it's same in the range of about 6%-7%, as we'd highlighted previously as well. Turkey is at about roughly, you know, 15%, and India continues to be around 7%, which all denotes that both the domestic volumes are also going up, apart from the, you know, foreign patient volume, which is a healthy sign. Island Hospital? Yeah, I think Dr. Prem mentioned this earlier. In our core markets, we continue to focus on organic and inorganic opportunities which are accretive to us, and that strategy hasn't changed. Yeah, and we, you know, as I've mentioned previously as well in many one-on-one meetings, we will be disciplined about it. A, the standalone asset has to make sense. Two, it has to be accretive to the network. Three, there needs to be synergy value that we can derive and value creation plan accordingly. And last but not the least, most importantly, it has to be, you know, earnings accretive in two to three years' time. So those are the foundations under which we will explore any M&A. Okay, thank you. I'll go back into the queue. Thanks. Thank you. Thank you. Just a moment for our next question, please. Next, we have a question from Nicole Goh from UBS. Please go ahead. Thanks very much for taking my question. My first question with regards to medical tourism as well. I think, Dr. Prem, you mentioned just now that for Malaysia, especially for the hospitals in Malaysia, you are seeing quite a number of medical tourists or the recovery of medical tourists coming from Indonesia, and I think that's the target for you also going forward. At the same time, I think the Indonesian government is trying to with the Omnibus law, as well as the special economic zones that they are currently building. I think the Indonesian government is trying to retain some of their patients who are currently coming to Malaysia and Singapore, to retain them in the country. So I guess, what do you think of that? That's my first question, and I think my second question is with regards to your margins. You know, I noticed that your margins for Singapore, Malaysia, has sort of trended down sequentially over the last few quarters. Noted it is probably because of the increase in manpower costs, but just wanted your thoughts on whether there's anything that IHH can do to try and boost margins back to the levels it was before? Thanks. Okay. I'll take the Indonesian reforms question, and maybe Dilip, you can talk about the margins. Now, I think we're all aware of the reforms initiated by the current health minister in Indonesia. Very positive developments for the country, I would say, and these are the factors that have made us look at Indonesia and I said this, I've said so, right, since I came on board, that we will look at Indonesia. It makes sense, it's adjacent to our other markets in ASEAN. It's also a country from which we receive a lot of medical tourists as well so we are looking at Indonesia. We have met the authorities, we have met minister, we've been there, and we've heard about the SEZ, and have looked at it as well. But in order for some of these reforms to take effect, my guess is that it's gonna take several years, all right? Many years to do that. Hiring in foreign doctors into the country, getting them to work in the hospitals, is gonna take time, right? We are aware of that. So we will watch Indonesia closely. I don't think it's gonna affect medical tourism, for now, right? Indonesians come to our countries and to our hospitals for various reasons, right? And at some point, I think it'd be good for Indonesia itself, right, if it were to develop good hospitals with competent doctors, right? So I don't think it's gonna be a problem for now. We will watch the Indonesian space quite closely to see what, you know, what we can do in the country in future. Yeah. And maybe to address your question on margins. You know, I think first of all, you know, I would highly recommend that we look at, you know, similar quarter last year margins, because, you know, whether we like it or not, you know, healthcare does have seasonality impact. And hence, if you look at some of the countries, Malaysia, you know, similar quarter last year, we were at 25% margin, and I guided the market as well, that we would stabilize around 25% margin. We continue to stabilize at about 25% margin, this quarter, second quarter of 2024 as well. Singapore, in fact, we have expanded margin. So last year, this quarter, we were at 29%. We've actually gone up to, you know, 32%, in terms of margin. And likewise, you know, the third big market, which is, you know, Europe and Turkey, we've actually moved up, you know, 100 basis points from 19% to 20% margin for similar quarter last year. And last but not the least, even if you look at our India business, again, we've moved up from 14% to 17% margin. So overall, on a like quarter last year, there's definitely been margin expansion across all our key markets. Thanks. Sorry, can I just follow up on that margin point there? So, I mean, as you mentioned, I think for Malaysia, you have guided that it will stabilize around 25%. But if you look at Malaysia historically, I think the margin was closer to 28%, high 20s, in terms of percentage, or if not closer to 30%. Is there... I guess my question is that, is there anything that, you know, that the company can do to actually try and raise the margins from here on, specifically for Malaysia? Or is it a deliberate strategy to sort of keep, I guess, prices attractive, at current levels? So if you kind of look at our, you know, performance run rate, sometimes we do see margins expanding about 25%. The reason why we deliberately guided the market at 25% is because there is also, bear in mind, a large, you know, organic expansion plan. So if you see, we've expanded our bed capacity by, you know, 5% over a similar quarter last year as well. So obviously, as the new beds come in, it does have, you know, a slight impact on margin. So that's why I'm saying on a steady state basis, I think to assume a 25% margin is reasonable. However, I think what is also important is to look at dollar value growth in EBITDA, and that is something that we are very focused on, and you can see we have a double-digit dollar value growth in EBITDA. Okay, got it. Thank you. Thank you. Just a moment for our next question, please. Next, we have Wee Kuang Tay from CGS International Securities Singapore. Please go ahead. Hi, yeah. Thanks for taking my questions again. Just wanted to check on dividend guidance, 'cause I see- we do see that, you know, the MYR 0.045 for first half of the year represents roughly about 40% kind of payout ratio. And you have- you do have a new payout ratio guidance of not below 30%. And just wondering whether this 40% is something you're comfortable with, given that most likely your CapEx plans will probably pick up going forward. Should we be expecting 40%? Is this where a comfortable level to maintain in the near term? So, you know, in the last year, we have actually increased our dividend policy to say at least, you know, 30%. And, you know, as part of our overall shareholder value enhancement plan, we announced that we also increased our dividend last year from MYR 0.07 to MYR 0.09 overall, the regular dividend. So I guess at this point in time, we are halfway through the year, and hence, you know, we felt it appropriate to look at a MYR 0.045 dividend. As I said, as for CapEx, our cash flow, as you must have seen in the slides, our operational cash flow is quite strong, and most of our brownfield expansion will be provided for from the cash that we generate already. Thank you so much. Thank you. I think I see quite a number of questions online, so we'll move on to the questions from the webcast participant. I think the first question that we got is from Chun Zhong. Any reason attributed to the quarter and quarter lower revenue intensity for Singapore, Malaysia and India? And of course, the second question, which I think Dr. Prem and even the team here has addressed, about what is the current status on Island Hospital, Penang deal? Maybe, Dilip, you want to take the first question on the revenue intensity? Yeah. Again, so if you look at, you know, revenue intensity itself, you know, again, as I mentioned, what you should look at is revenue intensity for a similar quarter last year. There are seasonal impact. And again, even sometimes, you know, in countries like India, the disease pattern changes based on weather, et cetera. So I think you should look at similar quarter last year, and if you look at similar quarter last year, in Malaysia, you know, if you look at IP revenue per IP admit, you can clearly see there is an uptick in terms of intensity of 7%. Likewise, if you look at Singapore, we have a double-digit uptick of about 13%. And again, likewise, you know, if you look at our Indian market as well, you will see that there is an uptick in intensity of 9%. So I think that's probably the way to kind of look at it, similar quarter last year. Thanks. Ashok, any comments on the current status on the Island Hospital, Penang deal? And then, I think subsequent questions, I know a few of you have questions about this hospital, Island Hospital. So perhaps, I think, Ashok, you want to address it once and for all, and then we can move on? Yeah, I think we've talked about it. I've already commented. Dilip has also commented as well, so I think that's our sort of feedback right now. Like we said, I think we in our core markets remain focused on both organic and inorganic opportunities, and I think, like Dilip mentioned as well, for every transaction we look at, there are clear rationale around strategic fit, strategic rationale. It needs to make sense from a financial valuation point of view and also in terms of earnings accretion. So I think we stay the course for as far as all M&A transactions are concerned. Sure. Thank you, Ashok. The next question that we have is from Raghav. So were there any one-offs in the Singapore hospital EBITDA in second quarter? Not really. I think it's, you know, more, I would say, from an operational excellence standpoint. Singapore in general, what we did see is, you know, we saw that the inpatient volumes had gone up, and likewise, the intensity had gone up as well. So both of that had gone up. And bear in mind, the volumes had gone up, despite, some of the larger hospitals reconfiguring double beds to single beds. So that clearly shows that, you know, it's a, it, it's a growth on all fronts rather than just, one front. Okay, the next question from Raghav again: What revenue intensity and margins do you see from the TCF@ East facility, and by when do you see it being EBITDA and net profit break even? Perhaps, Dr. Prem. Okay, maybe just start off by saying that this is a model. This, a TCF, Transitional Care Facility, is to decant patients from our overcrowded public hospitals, all right, into step-down care facilities that are operated by the private sector. We already have a few of them in Singapore, right? So this facility will be fully funded by the Ministry of Health, all right? In terms of the refurbishment of an existing, sort of, mothballed buildings. It'll be fully funded by them. CapEx, everything will be funded by them, and we will operate the private sector operates this, and there will be a constant flow of patients that are decanted from the nearby public hospital. In this case, it's in the east, so it'll be the eastern public hospitals like Changi General Hospital and Sengkang General Hospital. So, and that's a model that's worked very well already. In terms of the EBITDA, so maybe, Dilip, yes, I'm not sure what we have. Sure. So, again, look, you know, initial days, but the EBITDA break even, you know, definitely is faster than a tertiary hospital center, right? Because at the end of the day, the costs for running a TCF, the manning ratio, et cetera, are very different from a hospital. So I guess from a break-even standpoint, would be much faster than a hospital, a tertiary hospital. Thank you. The next question from Raghav: "What is the current bed capacity of GHK Hospital, and by when do you see this scaling up to the full capacity of five hundred beds?" Perhaps, Dr. Tsang or- Sure. Okay. So, let me kind of take the first question in terms of the current bed capacity. So we have three hundred plus beds, little over three hundred beds, that we have currently open and is operational. And as you, all of you know, we've been doing it in bite sizes in terms of, you know, ramping it up, quarter- on- quarter. And despite that, you do see the utilization moving up, you know, every quarter. So from a scaling up standpoint, I think we are in a good space. When do we attain full capacity? I guess that is something that, you know, we are working towards. As you know, we were a bit positive already, and we want to transition to PATMI positive as well, as Penny mentioned, previously. So I think, you know, as we go towards that, we do intend to scale up and reach the 500-bed capacity, you know, as soon as possible. Thank you. I think Kok Leong asked the question about the ringgit strength. I think we've addressed that quite extensively earlier, so I'll move on to the next question. Perhaps on Kok Leong's question, why Acıbadem's foreign patient dropped to 14% in first half of 2024, compared to about 20% in the last two years? Sure, so you know, if you look at, you know, Turkey as well, Turkey has had. There are two main reasons why the foreign patient volumes went down. I think one is mainly because of the fact that, you know, there were ten, almost more than ten extra days of holidays that were declared by the government for the two Eid breaks. That was reason number one. The second reason is, we also had the provincial elections that happened, earlier part of this year, so I think those are the two reasons, and traditionally we've also seen, Turkey generally, if you look at Q2 or rather, H2 versus H1, the second two quarters are always much, much stronger than the first two quarters, from a seasonality standpoint. Thank you, Dilip. A question from Sue. You've mentioned, specifically mentioned on focus on opportunistic M&A in Malaysia. I'm aware you can't quite comment on specific deals, but just wanted to get your thoughts on the availability of Island as a possible opportunity. I think, Sue, we've kind of addressed that earlier, but maybe what would be interesting. I know we can't talk about it, but maybe from a management perspective, actually, what attracts you to this hospital? I will leave out the question, would you put it out a bit, but maybe it'd be interesting to maybe put a few words- I think everybody knows that Island is a very good hospital, right? It's a hospital that's been around for a long time, right? It was started by doctors who are very passionate. They've grown their medical tourism, starting initially on the back of tourism from the north, right? But after that, you know that they have expanded, right? The facility is a very good location, right? So all in all, I think Island's a good hospital, right? But we also have very good hospitals as well, so. Specifically, Gleneagles, Pantai and- Yeah, yeah, we have Gleneagles, Pantai, we have Prince Court. So yeah. Yeah. Island is one of the very good hospitals in Malaysia. Yeah. Also, I just, you know, we talk about M&A. It's, it's. You know, we talked about Timberland a bit. Just in that hospital now, just to share, you know, we are already seeing operating performance better than what we had anticipated. So, you know, these transactions we take quite seriously. And, you know, it's, we do want to ensure that transactions we do give proper value from our shareholder returns point of view. And, you know, at the cost of reiterating, let me once again reiterate that any target that we look at, there are, again, as I said, key criteria that we look at. Number one, is the asset of good quality on a standalone basis? Number two, does it add value to our network? Number three, are there synergy and value creation plan that we can drive off the target, and our own network? And most importantly, is it EPS accretive, earnings accretive in latest year two, year three? So these are some of the key boundaries that we've set for ourselves, and we will be disciplined about what we do. Got it. Thanks, Dilip. That's very clear. Okay, we'll move on to the next question. Huan Luan from Macquarie. Could you please share with us how much operational bed rollout has been done in the first half of 2024 so far, and what is IHH on track to meet 2024 operational bed rollout target? Perhaps, maybe I can take that question on behalf of the management team. I think we have rolled out our 4,000 beds capacity over the next five years. I think within our presentation slides, we have also put up specific yearly targets. So perhaps rather than give you the first half, I think we'll embark to give you as of when we report our full year 2024 results. I think that will give you the status as, how much of that, we have reached that target, if that's fine. And I believe we are on track to meet that target that we have put out so far, Huan Luan. All right. And the next question, I'll move on, is Joseph, from JPM. In markets such as Malaysia and Singapore, how receptive are the insurers, payers, to medical inflation? Do you see increasing pressure from payers to cap rates? Okay, so firstly, I will say that all third-party payers are sensitive to increase, all right? Be it insurers, be it companies, corporates, right, those who pay for healthcare. Just as a patient who's paying for healthcare on their own will also be sensitive. So I think that's something we always keep at the back of our mind, right? So, and healthcare costs keep going up, so we do have to increase rates. If you look at our increase in fees and rates, it's usually just about inflation, or slightly more. We do not increase rates just to increase our revenue intensity. Almost all our revenue intensity growth comes from doing higher technology, higher acuity procedures, right? So we do that. Whether payers will accept rates, typically there is a cycle of meeting our big payers annually, all right? We do that both in Singapore and Malaysia. We meet them to explain to them why we need to increase rates in certain areas. For example, in Singapore, one of the big reasons for increase in medical inflation, and hence the need to increase our fees, is simply because of the nursing shortage, firstly, and the public sector in Singapore hiring more nurses. The public sector in Singapore pays very well, so we do have to match them as well. So when we match them, our manpower costs go up. We explain this to the insurers, and they fully understand it because it's in the news all the time, right? So they know. So they do accede to higher reimbursements, which also means that they typically are able... The central bank typically allows them to increase their premiums as well, and you can see that in Singapore, right? There is a mechanism for doing it. Malaysia, Bank Negara, is a little bit more sensitive, and for very clear reasons. All right? There's a big, there are lots of patients who are in the low and middle income who also access private healthcare, so they're a little bit more sensitive as well, right? And as, of course, I think payers always look to us to manage costs as well, right? And that's why I emphasize this whole concept of value-based healthcare, which I think is really now becoming a very, very sort of a big issue in, in healthcare delivery. Thank you, Dr. Prem. Next question from Pooja from Morgan Stanley. Hi. With Lira depreciation normalizing since March and diversification through Europe and tourism, what's the outlook for Acıbadem's business in revenues and margins? Yeah. I think, look, you know, Acıbadem is a very, very strong business that we operate. There are three pillars of growth, really, there, as you know. One is the local patients themselves. There is a significant base of local patients that Acıbadem serves and has been serving for many years. The second one is really in terms of foreign patients coming into Acıbadem, and the third pillar of growth is the European expansion, the Eastern European expansion, that Acıbadem has undertaken over the years. So at this point in time, if you look at each of these three segments, there is definitely growth in each of these three segments, and we are pretty confident of, you know, as we've always demonstrated, double-digit revenue growth, as well as, you know, we look at, you know, we've said Turkey plus Europe, margin stabilizing, upwards of 20%, and I think that is something that, you know, we are fairly confident of achieving. Thank you, Dilip. I know Dr. Prem talked early about value-driven, based, care. So we have one question from Chun Sung, RHB. Could value-driven, outcome-based payment model in Malaysia affects your revenue intensity, and which countries practice the similar payment model as well? Yeah. Okay, so a value-based healthcare is a group-driven program that's been rolled out in all our countries. All right? So when we say that we want to provide a value-based healthcare model for total knee replacement, right, it's rolled out first in possibly Singapore or Malaysia, then it goes to India, it goes to Turkey. It's even in Brunei for cardiac procedures in our small hospital, right? So value-based healthcare is, A, given across the group and in all countries. All right? I have to say. Although certain countries, because Brunei is purely a cardiac hospital, they will not be involved in TKR or in endoscopy and all that, right? So that's the first thing. Secondly, value-based healthcare would not affect revenue intensity significantly. Firstly, the number of procedures that we have rolled out, all right? It, it... VBH is not a mass market kind of a concept, right? It is for specific procedures, so we roll it out in stages, right? And the other thing is, revenue intensity is driven by other technologies as well, all right? So total knee replacement has been around for a while, but today you have proton beam, which I've explained, I think, in the last earnings call, right? Conventional radiotherapy is MYR 20,000 for a treatment cycle. Proton beam is MYR 50,000-MYR 60,000. So you can see the uplift in revenue intensity. But it is also a value-based healthcare model because proton treats the condition for the patient effectively. So value-based healthcare is not just about pushing down rates, all right? It is getting value for the dollar that is charged for that particular procedure, right? You know, it's a mix of things, but it does not affect revenue intensity significantly. Sure. Thank you, Dr. Prem. Next question from Gary, from PineBridge. Any impact from the protest in Kolkata? Sure. We, you know, we continue with our services, and we continue the, you know, providing essential services in our hospitals. So I do not see too much of impact, at this point in time from the protest in Kolkata. Sure. Thank you. Wee Kuang, from CGS, could I confirm that the holiday affected more from the staffing side rather than demand volume of tourists choosing Turkey as a medical tourism destination? So, yeah, if I can address that, it is a, you know, I would say it is a bit of both, right? Because obviously, you know, staffing is something that is fixed based on the operating beds. However, if there is, let's say, elections and if there are public holidays, you'd, A, you don't have volume coming into the hospital, but B, more importantly, you also have clinicians and staff who take away, or take off during those periods. So I would say it's a bit of both. And that's why you see the extra 10 days in the first half, having an impact, on what could have potentially been the volume growth otherwise. Thank you, Dilip. And question from Yi Sin from CIMB: Do you think the first half 2024 year-on-year growth in revenue intensity can sustain into the second half of 2024 across your geographical regions? And second, can you share that as you expand your bed capacity in Parkway Shanghai Hospital, do you expect it to maintain EBITDA breakeven or positive? And how many operational beds and occupancy rate currently for the Shanghai Hospital? Perhaps the first question first before we go to China. Sure. So in terms of our, you know, H1 2024 numbers, we saw, you know, pretty good growth on both accounts, both on volume as well as on intensity. And as we go into the second half of the year, we do see, you know, signs of that, you know, sustaining over the year of 2024, as we, as we sit here and see now. I don't see a reason why it shouldn't. We're hoping that, you know, the strength continues as we go into the second half of the year. And second part of it is about China. Maybe, Dr. Prem, you want to comment anything about our China hospital performance and- Okay. So China, we have two differing operations. One is the clinics, and that is the one we have spent quite a lot of time consolidating, all right? Closing some of the clinics, now moving it into a large ambulatory care center. The clinics are already, they are EBITDA positive, all right? And so we expect that that would continue. The hospital is still ramping up, all right? It, of course, is not open at full capacity. As Dilip said, we're opening it in bites. And I think the current occupancy rate could still be improved, all right? And I think that is now... After the clinics, the work on the clinics, I think the hospital is the next area that we are working on. Mm-hmm, and just to add to what Dr. Prem said, we will, as I have always mentioned, be mindful of the burn rate while ramping up the hospital as well. Got it. Thanks, Dr. Prem, Dilip. Question from Sue: Some peers have said that they're still facing staffing problems, i.e., the nurses. Are you still seeing this as an issue? You know, I've said this before, when I was a houseman, a junior doctor, we were short of nurses. We are short of nurses across the world today, 10 million nurses, according to WHO, we are short. 20 years down the road, we'll still be talking about a shortage of nurses, so this is a problem that will never go away, I can tell you that. But we are fortunate because currently, in most of our markets, we are well-resourced. Singapore actually is slightly over-resourced, but that's good because you will have some attrition that will happen. Malaysia is just about right, and I think the Malaysian government is about to open up, the nursing, the hiring from foreign markets, I believe Sri Lanka. All right? So we look forward to getting more nurses. India has a lot of nurses in the pipeline, right? But the attrition rate tends to be quite high in India because nurses are always seeking better opportunities. But it's not really a country with a lot of nursing shortages. I think Turkey faced some nursing shortages because of some of the issues they've had locally. But if you ask me, as a whole, we are very, very comfortable with our nursing manpower situation at the moment. Sure. Thank you, Dr. Prem. Maybe if any. I see we've probably another five minutes left before we end the call. Any last burning questions from my analysts, investors on the line? Otherwise, if not, I have maybe Dr. Prem just give a final takeaway and ending note for this great quarter that we've delivered. Yeah. So maybe, I sometimes say that our results can be a little bit boring, boringly good, right? But the fact is that I think we are on a very good growth momentum, all right? The ACE Framework guides us on what we need to do, all right? Our focus still remains on a major brownfield expansion plan, all right? And we'll continue to do that. There have been some questions on acquisitions, and as Dilip has said, as long as it's value accretive, it makes sense to our cluster strategy, our country strategy, we will look at it, all right? I think it's our responsibility to take a look at some of these things as they come along, but we'll be very disciplined about it. In terms of further expansion, I think there was a little bit of discussion about Indonesia. We are watching the Indonesian market. The other market that I've said is quite exciting is Vietnam. Both these markets, we get a lot of patients coming into our countries, all right? At some point, we will see whether it makes sense for us to go, but we are not in any hurry to do that. In the meantime, we will just focus on delivering good clinical care with good patient experience and outstanding patient outcomes, all right? Value-based healthcare, which has come out a few times, is one of our core priorities in all markets that we are in, all right? Working with payers, all right, to ensure that, you know, we charge reasonably, and they pay us appropriately, is also an important point for us. So all in all, I think we have done well for Q2, and first half of the year as well, right? And we yep, and where it's possible, we will pay good dividends as well. I think these are all the trends that you are seeing from IHH at the moment. Thank you. Thank you, Dr. Prem. Thank you, Ashok. Thank you, Dilip. Thank you. With that, we'll now conclude the IHH Healthcare second quarter 2024 financial results briefing. Thank you for joining us again this morning, and if you have any further questions, please do contact us at ir@ihhhealthcare.com. With that, we'll end this session. Thank you very much. Thank you. This concludes today's conference call. Thank you all for participating. You may now disconnect.