Pharmaniaga Bhd's new seven-year concession agreement with the Ministry of Health (MOH) until mid-2030 will maintain the same scope and responsibilities as the previous agreement, which was awarded over two decades ago, for the provision of medical supplies and medicines. (TheEdge)
SC is doing the right job to ban 2nd PP. This GLC is making the bad example to ruin Bursa regulation. If 2nd, 3rd PP and plus can be done in the same year, what is the meaning of requiring Shareholders approval for 10% issuing limit?
On the sector outlook, Kenanga noted global healthcare expenditures are projected to reach a total of US$10 trillion by 2026, increasing from US$8.4 trillion in 2022. — Bloomberg
PETALING JAYA: In the recently-concluded second quarter 2023 (2Q23) results, companies in the healthcare sector saw a slight sequential deterioration in earnings delivery against the expectations of Kenanga Research.
The research firm said out of the six companies under its coverage, three came within its forecasts, while three others disappointed.
“Generally, private hospitals under our coverage were hit by less patients seeking treatment during the festive month.
“Viewed as a blip, both IHH Healthcare Bhd and KPJ Healthcare Bhd expect patients to return in subsequent quarters.
“On the other hand, Pharmaniaga Bhd was hit by higher-than expected operating cost,” it stated in a report.
According to the research firm, the weaker-than-expected showing from IHH in the first half of 2023 (1H23) was due to its Singapore and Turkiye operations.
“The Turkiye operations were hit by festive holidays compounded by long weekend holidays as well as the presidential election.
“On the other hand, IHH’s Singapore operation was hit by staff shortage which is easing gradually.”
KPJ’s 1H23 results came in within expectation thanks to higher patient throughput and higher bed occupancy rate (BOR) of 66% (compared to 52% in 1H22) as demand for non-Covid related services rebounded including elective surgeries cases.
The group’s net profit doubled thanks to better overhead absorption on an improved turnover, as well as reduced losses from its new hospitals.
On the sector outlook, Kenanga noted global healthcare expenditures are projected to reach a total of US$10 trillion by 2026, increasing from US$8.4 trillion in 2022, representing a compound annual growth rate of 3.5% during the five-year period.
“In 2023, we expect IHH’s revenue per inpatient growth of 10%-15% (versus. 18% in 2022 due to low base effect in 2021), inpatient throughput growth of 10%-15% and BOR of 60%-73% (versus 56%-70%% in 2022) for its hospitals in Malaysia, Singapore, India and Turkiye.
“We believe the key growth for its inpatient throughput and BOR will be the return of elective surgeries and medical travel, the addition of new beds and the first full-year contribution from the Acibadem Atasehir hospital.”
Similarly, it expects KPJ’s patient throughput to grow 14% (versus 12% in FY22) with BOR of 70%, which will be driven by the recovery in demand for its services, particularly, non-Covid related ones including elective surgeries.
Kenanga Research liked both the stocks for their pricing power being major private healthcare players.
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