PETALING JAYA: Malaysia’s private healthcare sector has room for organic growth despite the challenges posed by the regulatory landscape in the country.
CIMB Research in a report said the growth prospects for private healthcare services are underpinned by the growing number of non-communicable diseases and an ageing demographic.
The research house forecasts private hospital bed capacity in Malaysia to grow at a compounded annual growth rate of 4% to 5% between 2023 and 2028, supported by multiple expansion projects currently underway or planned.
“This is against a backdrop of Malaysia’s hospital beds per 1,000 population at just 2.0, below the 2.5 average benchmark of developed markets.
“Within our coverage, KPJ Healthcare Bhd
and IHH Healthcare Bhd are respectively aiming to expand bed capacity by 53% and 43% (bringing total bed capacity to 6,000 and 4,978) by 2029 and 2028, positioning them well to capture incremental demand,” it explained.
CIMB Research noted total Malaysian private hospital bed capacity as of 2023 stood at around 18,779 beds and is anticipated to increase to between 23,000 and 24,000 beds by 2028 as new hospital facilities are commissioned and existing ones expanded.
Another factor to drive growth will be healthcare tourism (HT).
Malaysia welcomed 1.6 million healthcare travellers in 2024 (up 14% year-on-year), with Indonesians accounting for 70% to 80% of revenue.
Malaysia is targeting over 4.3 million and 4.7 million tourist arrivals from Indonesia in 2025 and 2026, respectively, in conjunction with Malaysia Year of Medical Tourism 2026.
“Private hospital players with HT exposure are poised to benefit from the campaigns.
“Furthermore, we note that HT revenue accounted for 6% and 12% of KPJ’s and IHH’s Malaysia revenue in the second quarter of financial year 2025 respectively, marking a steady increase as both companies have been focusing on attracting medical tourists via collaboration with foreign referral centres and setting up dedicated flagship medical centres,” it noted.
CIMB Research added the rollout of the diagnosis-related group framework at private hospitals has been postponed to 2027 to allow the new government health insurance product under the National Health Insurance Scheme to be rolled out first.
