Sustained demand to support healthcare growth

PETALING JAYA: The healthcare sector is poised for resilient growth underpinned by sustained demand, ongoing capacity expansion, and the continued recovery in elective procedures.

BIMB Securities Research maintained an “overweight” call on the sector in its report, citing improving operating leverage and resilience despite structural cost pressures.

The research house noted that private hospital operators are progressing with expansion plans being on track to meet rising demand.

KPJ Healthcare Bhd planned to ramp up two key assets in Selangor and targeted 4,200 beds by end-2025, while IHH Healthcare Bhd aimed to include 1,050 beds in Malaysia this year.

“This organic expansion is pivotal in absorbing unmet local demand and accommodating higher-value international cases,” BIMB Research said.

The research house noted that elective surgeries have also largely normalised, with volumes recovering to around 90% to 95% of pre-pandemic levels.

It stated that KPJ’s centres of excellence continue to drive higher-margin elective procedures, particularly in orthopaedics, cardiology, fertility, and oncology.

IHH’s key hospitals, including Gleneagles in Kuala Lumpur, Penang, Johor and Kota Kinabalu, as well as Island Hospital and Prince Court Medical Centre, had seen encouraging recovery in elective procedures.

BIMB Research noted that medical tourism – another key revenue stream – is also gaining momentum.

Malaysia generated RM2.25bil in medical tourism revenue in 2023, exceeding the Malaysia Healthcare Travel Council’s RM2bil target.