Favourable demographics boost healthcare
MALAYSIAN private healthcare providers are set to benefit from key demographic shifts and market developments that bode well for the sector over the next two years, says MIDF Research.
The research house said that among the factors that will encourage the adoption of private healthcare services were the increase in the elderly population, the increase in lifestyle diseases, the improvement in the standard of living, and greater urbanisation.
Furthermore, with the ringgit at current levels, Malaysia may fare better in attracting medical-tourism travellers seeking treatments.
It also means that the public sector can concentrate more on providing services to the lower income patients and those with complex health issues, it said.
MIDF currently has a “positive” rating on the Malaysian healthcare sector. It currently has a “neutral” rating on the two healthcare providers under its coverage, IHH Healthcare and KPJ Healthcare.
“IHH is our top pick due to strong earnings-growth prospects, a strong management team, robust balance sheet, and well-diversified revenue base. Backed by strong demand especially in urban areas, we opine that private healthcare operators will continue to be the preferred choice for urban dwellers with higher disposable income and insurance coverage,” it said.
This year, IHH and KPJ are expected to add 135 and 180 beds respectively into their existing pool of beds. With more coming in next year, MIDF added that this showed an impressive ramp-up in capacity, which means that demand should be resilient.
