It's one of the ancient 'christograms': basically, a monogram representing Christ. Most of them are in Greek, and this is no exception.
In the Greek New Testament, Jesus's name is spelt "Ἰησοῦς" (Iesous). Written in the Greek equivalent of capital letters (especially suitable for inscriptions) it looks like "IHSOUS". From this, it is obvious that what looks like the Latin uppercase versions of "ihs" is in fact the Greek uppercase versions of "Ἰησ", and is the beginning of Jesus's name.
So, it is an abreviation for "Jesus".
Other bits of Greek left over from early Christianity, that you might have seen, are the chi-rho ΧΡ which is the first two letters of "Christ" (ΧΡΙΣΤΟΣ), the ichthys fish, and the prayer "kyrie eleison".
Incidentally, I have never seen a Eucharist wafer with IHS on. I've seen IHS in various religious art, but I've never seen it on a wafer. I'm not saying no wafers have it, but it's unusual. Most have little crosses, or other designs. It's chosen by whoever makes them, and then the churches buy them. Just one of the ways that Jack Chick's comics exist in an alternative reality.