• Speakers and experts from Ramsay Sime Darby Healthcare, DoctorOnCall, Sustainalytics, Pharmaniaga and KPJ Healthcare shared their insights and strategies on an array of topics during our healthcare conference
• Key trends: (i) private hospitals are exploring opportunities in the ambulatory care centre / day surgery centre segment; (ii) private hospitals and digital healthcare providers are keen to expand digital healthcare services but there are hesitations from some doctors; (iii) there are limited near-term opportunities for private companies in Covid-19 vaccination
• All in, the long-term business prospects for the healthcare sector and demand drivers are largely intact. Maintain OVERWEIGHT

Captains, experts shared their insights on various topics in healthcare industry

During our one-day Affin Hwang Capital Healthcare Virtual Conference 2021, the captains and experts from the healthcare industry shared their insights and strategies on a wide array of topics covering key trends, including the rise of digital technology, ESG, the impact of Covid-19 pandemic and the opportunities in the private hospitals / pharmaceutical industries.

Key Summary From the Speakers

Covid-19 has hit Ramsay Sime Darby Healthcare (RSDH)’s Malaysia operations but its Indonesia hospitals are seeing higher revenue due to screening, treatment of Covid-19 patients and higher patient arrivals (the closure of borders has forced Indonesians to seek treatment locally instead of travelling to Singapore / Malaysia). RSDH also shared on their growth strategies. In 2020, DoctorOnCall saw a sharp yoy increase in its user base and revenue. The company expects further growth ahead and emphasised that digital healthcare providers are a partner, and not a competitor to private hospitals / clinics. Sustainalytics presented on the rising importance of ESG and explained how significant events have affected the rating of some Malaysia Healthcare companies. Pharmaniaga gave a deep dive into Malaysia’s biologic / vaccine markets and an update on their vaccine project. Meanwhile KPJ Healthcare shared the group’s strategy in managing the Covid-19 pandemic, its assistance to the Ministry of Health in handling the non-Covid-19 patients and the business opportunities ahead.

Maintain OVERWEIGHT

Key trends: (i) the private hospitals are exploring opportunities in the ambulatory care centres / day surgery centres in anticipation of higher demand and the relatively lower capex / faster turnaround; (ii) the private hospitals and digital healthcare providers are keen to expand the digital-health services but there are hesitations from some doctors; and (iii) the Covid-19 vaccination is tightly-controlled, with limited near-term opportunities for the private companies. Overall, the long-term industry demand drivers (aging population, growing middle class, under-penetration in certain markets) are intact and we maintain our OVERWEIGHT rating. Our top pick is IHH (BUY, TP RM6.40) for its leading position as a premium private healthcare provider with growing presence in countries where healthcare demand is underserved.

Source: Affin Hwang Research - 22 Mar 2021