• Old but gold. This report attempts to analyse the dynamic shift in thepopulation age profile across Indonesia, Malaysia, Singapore and Thailand.In view of the falling birth rates and longer life expectancy across ASEAN,the population of this region could be labelled as one that is ageing by 2030.We believe this could present potential investment opportunities, asbusinesses and healthcare service providers can gradually cater theirproducts and services towards the growing aged populace.

• Structural demographic shift. The global portion of those aged 65 yearsand above is projected to rise to 16% of the total population by 2050, from10% in 2022, according to the United Nations (UN). Key factors behind thisgrowth: Higher life expectancy rate, drop in the fertility rate, longer lifeexpectancy rate for women, coupled with the growing portion of women(55.7% of the global population) vs men (44.3% of the global population).China, the world’s most populous country, now has a low birth rate of just6.77 births per 1,000 persons in 2022, from 7.52 per 1,000 persons in 2021.

• Redistribution of spending patterns. The share of consumers aged 65years and above is expected to outpace that of the other age groups, at65.6% in 2020-2030. This segment will also make up 13.7% of the globalpopulation by 2030F, from 11.7% in 2022. The shift in consumer classwould also mean a redistribution of consumer spending behaviour, asconsumers in the senior age group may likely have greater purchasingpower. The term “silver economy” covers products and services deliveredto and consumed by people aged 60 years and over. Asia is expected tosee a rapid growth of the silver economy, with annual consumer spendingfrom senior citizens in China expected to triple from USD750bn toUSD2.1trn over 2020-2030.

• What does it mean for ASEAN? The global growth of the silver economyis expected to shift from the Organisation for Economic Co-operation andDevelopment (OECD) economies to Asia in the next decade. According toAgeing Asia, Asia Pacific’s silver economy market size is estimated to growat a 2020-2025 CAGR of 7.3% to USD4.6trn. According to Deloitte Monitor,there will be large differences in silver consumer spending across the topsix sectors in different countries (Figure 55). This should createopportunities in aged care services and lead to advancements in healthcareservices, given the increase in health complications as well as publicinfrastructure to accommodate this demographic change in the region.

• Ageing ASEAN stock ideas. Our actionable ideas are divided into twocategories: Direct and indirect proxies. Companies categorised under thedirect category are basically healthcare service providers, while the indirectproxies are companies involved in distributing and manufacturing medicalequipment, health supplements and private nursing home operators. Directproxies: KPJ Healthcare, Raffles Medical, Bangkok Chain Hospital,Bangkok Dusit Medical Services, Medikaloka Hermina and; Indirectproxies: LKL International (LKLI MK, NR), ComfortDelGro, Kalbe Farma,Mega Lifescience, First Real Estate Investment Trust (FIRT SP, NR) andEcon Healthcare Asia (ECON SP, NR).

Source: RHB Securities Research - 8 Nov 2023