With economic activities returning to near normal post-pandemic , most healthcare-related players see improving prospects
08
THE HEALTH | JUNE , 2023
| Cover Story |
BY MATHENNY K
THE Covid-19 pandemic was Malaysia ’ s worst public health disaster . The healthcare sector – except for glove manufacturers – was hit by the virus during that period . After battling with the ravages of the pandemic for two years , including a questionable health emergency declaration , Malaysia moved into the endemic phase in April 2022 .
The healthcare sector in Malaysia is slowly gaining traction and is expected to continue seeing growth . Research firm Kenanga said it liked private healthcare providers given the inelastic demand and growing global healthcare expenditure , projected to reach US $ 10 trillion by 2026 .
“ We expect domestic and international patient throughputs and medical tourism to continue to recover throughout 2023 , driven by the return of elective surgeries over the immediate term . The longer-term prospects of private healthcare are underpinned by rising affluence and an ageing population .“
We look at the listed healthcare players based on a market capitalisation of over a billion ringgit at the end of May 2023 . It ’ s a mixed bag of nine companies ( Table 1 ).
GLOVES : MODERATE RECOVERY
Four glove manufacturers are on the list , despite the bubble bursting with falling demand and prices amidst competition . They are Top Glove Corporation Berhad , Hartalega Holdings Berhad , Kossan Rubber Industries Berhad and Supermax Corporation Berhad .
During the pandemic , the glove industry experienced its strongest growth historically in 2020 and 2021 . The surge in demand attracted many new players to enter the market whilst existing players ramped up production , resulting in an oversupply situation today .
The Malaysian Rubber Glove Manufacturers Association ( Margma ) said global demand of 300 billion pieces is expected for 2023 . Margma collected the data from various sources – the Department of Statistics , overseas customers making factory visits , data from the Malaysian Rubber Council , customer attendance at glove-related exhibitions globally and feedback from our 80 manufacturers regarding customer buying sentiment .
Analysts expect the demand-supply situation will only start to head towards equilibrium in 2025 when no more new capacity is coming onstream . The global demand for gloves rises by 15 per cent annually , underpinned by increasing hygiene awareness .
HOSPITALS : MEETING PENT-UP DEMAND
The next largest group on our list are the hospitals , which are seeing pent-up demand for their services post-pandemic . They are IHH Healthcare Bhd , KPJ Healthcare Berhad and TMC Life Sciences Berhad . The recovery in medical tourism will likely continue throughout 2023 , driven by the return of elective surgeries over the immediate term . In 2022 , Malaysia ’ s healthcare travel industry recorded more than RM1.2 billion in revenue .
PHARMACEUTICALS : RISING PROSPECTS
The remaining group comprises pharmaceutical companies Apex Healthcare Berhad and Duopharma Biotech Berhad . In the pharmaceuticals and over-the-counter ( OTC ) drugs segment , independent market researcher The Statista Consumer Market Outlook projects the OTC pharmaceuticals
Healthy prospects
With economic activities returning to near normal post-pandemic , most healthcare-related players see improving prospects
Table 1 : How the top nine stack up
# |
Company |
Primary |
Market Cap |
Head Honcho |
Largest |
|
|
Business |
on May 26 |
|
Shareholder |
|
|
|
RM ’ bil |
|
|
1 |
IHH Healthcare Berhad |
Hospitals |
51.5 |
Joe Sim Heng Joo , |
MBK Healthcare |
|
|
|
|
Group COO |
Management Pte Ltd |
2 |
Top Glove Corporation Berhad |
Gloves |
9.4 |
Tan Sri Dr Lim Wee Chai , |
Tan Sri Dr Lim Wee |
|
|
|
|
Executive Chairman |
Chai |
3 |
Hartalega Holdings Berhad |
Gloves |
8.1 |
Kuan Kam Hon @ Kwan |
Kuan Kam Hon @ |
|
|
|
|
Kam Onn , Executive Chairman |
Kwan Kam Onn |
4 |
KPJ Healthcare Berhad |
Hospitals |
4.9 |
Datuk Md Arif Mahmood , |
Johor Corporation |
|
|
|
|
Chairman |
|
5 |
Kossan Rubber |
Gloves |
3.7 |
Tan Sri Lim Kuang Sia , |
Lim family via Kossan |
|
Industries Berhad |
|
|
Group MD and CEO |
Holdings ( M ) Sdn Bhd |
6 |
Supermax Corporation Berhad |
Gloves |
2.4 |
Datuk Seri Stanley Thai |
Datuk Seri Thai Kim |
|
|
|
|
Kim Sim , |
Sim and Datin Seri Tan |
|
|
|
|
Executive Chairman |
Bee Geok via Supermax Holdings Sdn Bhd |
7 |
Apex Healthcare Berhad |
Pharmaceuticals |
1.9 |
Dr Kee Kirk Chin |
Dr Kee Kirk Chin and Kee , |
|
|
|
|
Chairman and CEO |
Kirk Chuen via Apex |
|
|
|
|
|
Pharmacy Holdings Sdn Bhd |
8 |
Duopharma Biotech Berhad |
Pharmaceuticals |
1.4 |
Leonard Ariff Abdul Shatar , |
Permodalan Nasional Berhad |
|
|
|
|
Group MD |
|
9 |
TMC Life Sciences Berhad |
Hospitals |
1.0 |
Wan Nadiah Wan Mohd |
Peter Lim Eng Hock via |
|
|
|
|
Abdullah , CEO |
Sasteria ( M ) Pte Ltd |