JUNE , 2023 | THE HEALTH

market in Malaysia to grow at a compound annual growth rate ( CAGR ) of six per cent to an estimated US $ 715 million ( RM3.3 billion ) by 2027 as consumers take a more proactive stance towards their health and well-being – including taking health supplements regularly – especially in the aftermath of the pandemic .

Increasing health awareness among consumers to improve immunity against Covid-19 and other non-communicable diseases ( NCD ) is expected to propel the growth of OTC consumer healthcare products .

HEALTHCARE OUTLOOK

The demand for private healthcare will be amplified due to the surge of chronic diseases across the globe . The World Health Organisation reported that half of the global healthcare expenditure will be spent on three leading causes of death – cardiovascular diseases , cancer , and respiratory diseases .

In addition , the Malaysian Ministry of Health received the second-highest allocation at RM36.3 billion under Budget 2023 , with the bulk of the funding mainly used for procuring medicines , reagents , vaccines , and consumables . – The Health

1 . IHH Healthcare Berhad

Market cap : RM51.5 bil OWNING hospital brand names such as Pantai , Gleneagles , and Prince Court , IHH Healthcare Berhad is Malaysia ’ s secondlargest private healthcare Group . It provides various established healthcare services , including private hospitals , ancillary services , and medical education facilities . IHH Healthcare is dual-listed on the main boards of the Malaysia and Singapore stock exchanges and has one of the world ’ s largest healthcare networks , with 83 hospitals in 10 countries .

The company is cautiously optimistic about robust growth from its core business with the return of local and foreign patients to its hospitals . Moving forward , the Group will continue to drive bed occupancy , optimise the capacity of its existing operations and further scale up in Malaysia , India and Turkey to meet the increasing demand for quality healthcare services .

Mount Elizabeth Hospital in Singapore is undergoing a major refurbishment which will be phased over three years to minimise disruptions . IHH also plans to grow its laboratories as a distinct platform to expand its reach and to provide end-to-end laboratory services to patients and clients .

According to its group chief operating officer Joe Sim Heng Joo , it is looking for more partnerships or mergers & acquisitions . IHH ’ s proposal to buy Ramsay Sime Darby Healthcare for RM5.67 billion recently fell through as both parties could not reach an agreement .

In February , the Group expanded its footprint into Turkiye ’ s third-largest city of Izmir by acquiring Kent Health Group , which operates the largest private hospital and two other medical centres in Izmir .

IHH also sold its Malaysian education business , IMU , this year . The sale , which includes the disposal of a hospital under construction owned by IMU Education to Columbia Asia , generated a divestment gain of RM900 million . The sale will further redeploy capital to strengthen the company ’ s core hospital operations .

In February , the divestment of Gleneagles Chengdu Hospital Company Limited , a 49-per cent-owned subsidiary , was completed . Although the healthcare industry faces headwinds such as higher operational costs and nurse shortages , IHH is confident of its long-term growth trajectory , underpinned by megatrends in healthcare , its operational resilience , and its strong financial position .

IHH ’ s largest shareholder is MBK Healthcare Pte Ltd , with 32.8 per cent .

2 . Top Glove Corporation Berhad Market cap : RM9.4 bil ESTABLISHED in 1991 , Top Glove Corporation Berhad is the world ’ s largest glove manufacturer . It is also listed on the Singapore Exchange ’ s main board .

It started as a local business enterprise with only one factory and one glove production line and today operates 50 factories across Malaysia , Thailand , China and Vietnam , with 812 glove production lines which can produce 100 billion pieces of gloves per annum . Besides these countries , Top Glove also has marketing offices in these countries and the USA , Germany and Brazil . In its recent three quarters , Top Glove slipped into the red , and the glove company attributed the loss to headwinds that weighed heavily on the glove industry , such as the ongoing glove oversupply situation combined with a lack of customer urgency to place orders in light of shorter delivery times from lower manufacturer utilisation .

In addition , rising production costs – which the glove producer could not share with customers owing to moderating average selling prices ( ASPs ) – also contributed to the muted financial results .

The company said this was a temporary phase that Top Glove has to weather after two years of elevated pandemic-driven glove demand . This challenging and competitive business landscape is expected to endure through 2023 .

The glove maker believes the glove industry will recover as its fundamentals remain robust and unchanged . It will be a matter of time before the results reflect the glove industry ’ s potential . To mitigate the effects of the headwinds , Top Glove will continue implementing efficiency enhancement and cash conservation initiatives to drive recovery and improve its bottom line while increasing ASPs to offset rising costs .

Earlier in May , the glove maker said it might adjust its production capacity and workforce as necessary amidst a challenging oversupply of gloves on the market . For the record , its peer Hartalega Holdings Berhad announced it was decommissioning its Bestari Jaya production facility .

For its financial year 2023 and beyond , Top Glove will refurbish and upgrade its existing production lines to be firmly positioned for when the industry recovers . The company is controlled by its founder and executive chairman Tan Sri Dr Lim Wee Chai , the largest shareholder with a direct stake of 27.84 per cent .

3 . Hartalega Holdings Berhad Market cap : RM8.1 bil FOUNDED in 1988 , Hartalega Holdings Berhad is the world ’ s largest nitrile glove manufacturer , with a 44 billion pieces production capacity per annum . With a market capitalisation of RM8.1 billion , Hartalega is the second largest glove maker by market value listed on Bursa Malaysia . Like other glove manufacturers , Hartalega ’ s fortunes continue to be weighed down by a massive supply over-capacity while global demand is still weak and average selling