KUALA LUMPUR, July 10 — Kenanga Research has maintained its overweight rating on the healthcare sector, given the inelastic demand as well as the growing global healthcare expenditure which is projected to reach US$10 trillion (US$1=RM4.66) by 2026.
In a note, the research house said both domestic and international patient throughputs and revenue intensity is expected to continue to gain momentum moving into the second half of 2023.
It said the momentum will be driven by the return of elective surgeries over the immediate term, while the longer-term prospects of private healthcare are underpinned by rising affluence and an ageing population.
“All in, we see earnings resilience and catalysts from all three areas of healthcare under our coverage — private hospitals; pharmaceuticals and over-the-counter (OTC) drugs; and immunotherapy,” it said.
On private hospitals, Kenanga projected IHH Healthcare Bhd’s patient throughput growth and revenue intensity to drive 2023 earnings on sustained demand for elective surgeries.
“Similarly, we expect KPJ Healthcare Bhd’s patient throughput to grow 14 per cent year-on-year, driven by recovery in demand for its services, particularly non-Covid-related ones, including elective surgeries,” it said.
Kenanga added that an independent market researcher projected the OTC pharmaceuticals market in Malaysia to grow to an estimated US$715 million by 2027 as consumers take a more proactive stance towards their health and well-being, especially in the aftermath of the Covid-19 pandemic.
Meanwhile, it said according to an India-based market research firm, the global immunotherapy market is projected to grow to US$275 billion by 2025 from US$163 billion in 2020, largely driven by the rising adoption of immunotherapy in the treatment of diseases, especially cancer, as well as post-conventional treatments. — Bernama