KUALA LUMPUR, Dec 22 — RHB Investment Bank Bhd (RHBIB) has maintained its ‘overweight’ call on the healthcare sector, premised upon new growth drivers and structurally higher cost of care.
In its Sector Update research note, the research firm’s top pick for the sector was IHH Healthcare Bhd, premised on the company’s defensive demand, with diversified presence and operational recovery in its lagging markets, Malaysia and Singapore.
Looking beyond the recovery, RHBIB believed that there could be additional upsides from IHH Healthcare management’s restructuring efforts that will boost its return on equity (ROE)-enhancing strategy.
“That said, we also like Duopharma Biotech Bhd (DBB), given its upside potential and long-term growth prospects arising from its investment into higher-value products.
“We believe its vaccine opportunity miss has been overblown, and attention should be focused on DBB’s consistent execution,” it said.
Over the longer term, RHBIB believes that the healthcare sector will remain on an upward trajectory, owing to the ageing population, increasing adoption of private insurance and higher quality of care.
Key risks to its recommendation include delays in vaccine booster rollouts, emergence of new Covid-19 variants derailing economic reopening, and foreign exchange fluctuations. — Bernama
