PETALING JAYA: Healthcare stocks have remained relatively resilient since the Covid-19 pandemic broke out at the beginning of this year.
Analysts said there are expectations companies operating in this space could gain as demand could potentially rise during this period of time.
While the broader market and FBM KLCI fell, share prices of key hospital groups such as IHH Healthcare Bhd and KPJ Healthcare Bhd had seen their year-to-date performance at +1.65% and -0.53%, outperforming the broader declines in the market.
“While the rest of the market have fallen, they have not lost as much value; they are defensive but another point to note is that they (are) potential gainers, ” said an analyst from a local institution.
IHH last had a market capitalisation of RM48.7bil while KPJ’s market capitalisation stood at RM4.2bil at press time.
“The government had also indicated that they are allowing for the private sector healthcare providers to carry out the Covid-19 tests and while this contribution may not be that big but the private hospitals may need to also be on standby for patients if the need eventually arises in the future, ” he added.
Public Research in its report yesterday had reiterated its “overweight” stance on the healthcare sector after the World Health Organisation declared on Wednesday the Covid-19 a global pandemic.
Public Research said that the Covid-19 diagnostic test costs around RM600.
“The Health Ministry has also allowed IHH’s hospitals under the Gleneagles and Pantai brand name in Kuala Lumpur (KL) and Melaka to carry out such tests. IHH will continue to roll out this service to others states in Malaysia like Ipoh, Penang and Johor where it has a presence, ” it said.
“KPJ is too offering the same Covid-19 diagnostic test, but its availability is currently limited to the major KPJ hospitals located in KL, ” the research house added.
The service is also available on-demand in Malaysia and by other providers as well, it said.
“We view the rolling out of the diagnostic test by private sector positively as it encourages early detection for potential carries that does not fall under the patients under investigation criteria outlined by the MoH and it prevents overcrowding in the public hospitals, ” it said.
“It will also serve as an alternative stream of revenue to companies involved, but the contribution is still small at this juncture.
“Should the condition worsen locally, we think that there might be a possibility to outsource part of the testing to private healthcare providers, in order to relieve the burden of public hospitals, ” Public Research added.