KUALA LUMPUR, Feb 12 — The recent Covid-19 outbreak is likely to have minimal impact on Malaysia’s healthcare sector in the near term, says Affin Hwang Capital.
Nevertheless, in the long term, rising healthcare awareness arising from the outbreak should be positive for the sector, the research house’s analyst Chua Yi Jing said in a note today.
“We maintain our ‘overweight’ rating on the healthcare sector and recommend investors to position defensively in the industry.
“On a positive note, a possible retraction of the proposed medicine price controls, potentially due to the already competitive pricing in Malaysia and the fear of losing access to the latest and most innovative single-source medicines, could be a positive catalyst to the private hospital operators,” she said.
Chua said Affin Hwang Capital’s top pick is Apex Healthcare.
Going into 2020, the research house recommends positioning in the pharmaceutical space as a potential earnings recovery play and beneficiary of the government’s initiatives to liberalise drug distribution in the country.
“Key downside risks include sharp declines in patient volumes, higher-than-expected start-up losses for new hospitals, execution risk, currency risk, product recall risk and regulatory risk,” it said
Overall, Affin Hwang Capital said it believes that the healthcare sector will continue to enjoy relatively resilient growth, underpinned by an ageing population, rising affluence, rising healthcare awareness, growing healthcare expenditure, rising medical insurance and increasing life expectancy. — Bernama
