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KUALA LUMPUR (Sept 20): RHB Investment Bank Research has maintained its “Overweight” rating on the healthcare sector and said despite soft 1H22 earnings, the sector saw encouraging patient visit growth during the period (KPJ Healthcare Bhd ): +8%; IHH Healthcare Bhd: +25%), while industry players are poised to leverage on the arrival of international patients post reopening of international borders in April.
In a note on Tuesday (Sept 20), the research house said Duopharma Biotech Bhd’s (DBB) near-term prospects should be anchored by consumer healthcare (CHC) and the recent renewal of its RM375 million human insulin procurement contract.
On its outlook for the sector, RHB said IHH should fare better in terms of medical tourism, reflecting its state-of-the-art medical facilities and strategic geographical presence in meeting the needs of affluent patients.
It said in terms of medical tourism revenue contribution, IHH has higher exposure than KPJ (15% vs 7%), which is in line with house expectations for it to leverage on its vast hospital network within the region, to capture pent-up demand from returning medical tourists.
“For DBB, while the CHC segment delivered better-than-expected sales in July/August, FY22 growth may be lukewarm due to the high-base effect in FY21.
“We expect its CHC revenue growth to be more meaningful from FY23 onwards, driven by strong brand recognition as well as resilient consumer demand for healthcare and supplement products,” it said.
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“We continue to like IHH for its better-than-peers’ recovery, stronger strategic advantage to capture the return of medical tourists, and relatively resilient healthcare spending,” it said.
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