Asean healthcare sector to be lifted by demographics, digital trends: RHB
Helene Tian
STRONGER demand for medical treatments and advances in technology may lift the earnings of Asean healthcare players, said RHB in a sector report on Tuesday (May 10).
The research team is also projecting a material rebound in non-Covid-19 treatments and services at hospitals across Singapore, Malaysia, Indonesia and Thailand.
RHB has a “buy” call on Singapore’s Raffles Medical Group, and has pegged its target price at S$1.55. It also has buy calls on the following stocks:
- Malaysia’s IHH Healthcare (target price: RM7.50)
- Indonesia’s Medikaloka Hermina (1,400 rupiah)
- Thailand’s Bangkok Dusit Medical Services: (29.50 baht)
Raffles Medical shares on Tuesday ended flat at S$1.15 as at 5.04 pm; IHH Healthcare’s Bursa Malaysia-listed shares were trading 1.1 per cent or RM0.07 higher at RM6.43 as at 4.50 pm. Medikaloka Hermin shares were trading 1.4 per cent or 20 rupiah lower at 1,380 rupiah as at 4.06 pm, and Bangkok Dusit Medical Services was trading 2.2 per cent or 0.55 baht higher at 25.25 baht as at 5.37 pm.
Across Asean, RHB noted the prevalence of noncommunicable diseases (NCDs) as the leading cause of mortality. The most common causes of death in the 4 countries are ischemic heart disease and strokes.
“Urbanisation has brought about a rapid change in lifestyle, which contributed to a higher risk of NCDs,” RHB said. And the increasing number of NCDs will, in turn, result in greater healthcare needs.
A NEWSLETTER FOR YOU
Friday, 8.30 am
Asean Business
Business insights centering on South-east Asia's fast-growing economies.
“This further points to the greater demand for healthcare treatment at hospitals, moving forward, providing lucrative investment opportunities for private hospital players.”
The RHB analysts also noted growing adoption of digital technologies in the delivery of healthcare.
“All public listed hospital companies have several initiatives in place, ranging from telemedicine and collaborating with startups to using technology to improve operational processes and enhance efficiencies,” the brokerage said.
Although contributions from such initiatives are still “meagre”, RHB sees opportunities for new technologies to both solve problems and generate additional revenue streams in the future.
There will therefore be opportunities for both startups and established players to profit.
“We have seen such startups needing support from existing players to remain at the forefront. Collaborations are happening between existing providers and healthtech startups, signalling a deeper integration between the two counterparts across the region. This should be a positive development for the hospital players, in our view.”
Copyright SPH Media. All rights reserved.
