KUALA LUMPUR: Affin Hwang Capital Research expects generic pharmaceutical producers to be best poised to benefit from the deliberated policies relating to the healthcare sector.
However, it said, organic recovery and the sheer size of an expanded healthcare expenditure should well catalyse the entire sector.
The Pakatan Harapan government, in its election manifesto, aimed to elevate health expenditure from 4% of GDP to up to 6-7% of GDP.
While the increased allocation represents a 50-75% surge in healthcare expenditure, the source of funding appears uncertain at this juncture, the research house said in a note on Tuesday.
Based on deliberated policy changes, it said it was possible that the M40 (middle 40% of Malaysian households by income) and T20 (Top 20%) may pay more for outpatient treatment while B40 (Bottom 40%) could be government-subsidised.
“More importantly, we examine and identify the impact of three prominently deliberated healthcare policies such as the Peduli Sihat nationwide implementation, tripling of standalone private clinics consultation fees and monopoly breakup of pharmaceutical concession.
“While the generic pharmaceutical producers are the most likely to benefit, the sheer size of an expanded healthcare expenditure should well catalyse the sector,” it added.
It maintained its Overweight stance on the Healthcare sector, with KPJ as its top pick for the sector for its improved domestic outlook and attractive valuations.
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