The better utilisation rate for the healthcare sector as medical tourism picks up, says RHB Research

By TIN Media | Medical Tourism Published 2 weeks ago on 20 September 2022
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RHB Research predicts that starting in the third quarter (Q3) of 2022, the influx of local and foreign patients seeking medical care in Malaysia will steadily improve the sector's utilization rates.

The domestic healthcare sector saw encouraging patient visit growth during the period, according to the bank-backed research firm, and industry players are ready to capitalize on the arrival of international patients following the reopening of international borders in April, it said. This is despite the weak first half of 2022 (1H22) earnings.

The research company reported that in its most recent second quarter (Q2) 2022 results, IHH Healthcare Bhd and KPJ Healthcare Bhd demonstrated a solid rebound in operating indicators.

It added that once the border reopened in April, IHH's operations in Malaysia and Singapore saw increases in the number of returning medical tourists of 17% and 1.5%, respectively.

IHH Healthcare should do better in terms of medical tourism, according to RHB Research, as a result of its cutting-edge medical facilities and strategic geographic location in satisfying the needs of rich patients.

This is consistent with the research firm's prediction that IHH will use the region's extensive hospital network to meet pent-up demand from returning medical tourists.

Despite better-than-expected sales in the consumer healthcare (CHC) category in July and August, Duopharma Biotech Bhd's growth in the financial year 2022 (FY22) may be muted due to the high-base effect in FY21.

According to the statement, "We anticipate Duopharma Biotech's CHC revenue growth to be more significant from FY23 onward, backed by high brand recognition as well as sustained consumer demand for healthcare and supplement goods."

In general, RHB Research still favors IHH due to its superior strategic advantage to seize the return of medical tourists and reasonably stable healthcare spending, as well as its better-than-peers recovery.

The research group retains an overweight rating for the industry with many important negative risks, such as the Ministry of Health's unfavorable medicine pricing structure and the re-imposition of border controls in domestic and international markets.


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