PETALING JAYA: The healthcare sector is entering a new phase of growth, driven by stronger earnings quality, operational efficiency and better monetisation of healthcare demand, according to BIMB Securities Research.
The research firm has maintained its “overweight” call on the sector following the recently concluded first-quarter 2026 (1Q26) earnings season.
“The 1Q26 earnings reinforced what we believe is increasingly becoming the defining theme for Malaysia’s healthcare sector – growth is no longer a post-pandemic normalisation story, but more of higher-quality earnings and stronger monetisation of healthcare demand”, it said.
Hospital operators continued to deliver a resilient performance, with IHH Healthcare Bhd
posting year-on-year core earnings growth of 8%. The research house pointed out that the improvement was supported by stronger case mix, firmer pricing and rising patient intensity.
Average revenue per inpatient also continued to climb, increasing 12% for IHH Malaysia, reflecting the operators’ ability to generate higher value from existing assets through specialist-led services, higher-acuity procedures and daycare offerings rather than merely expanding bed capacity.
BIMB Research noted that earnings before interest, tax, depreciation and amortisation margins remained healthy at about 22%, highlighting the sector’s pricing power and ability to manage ongoing cost inflation.
Among the healthcare names under its coverage, Pharmaniaga Bhd emerged as the standout performer.
The company recorded a 31% year-on-year increase in profit after tax and minority interests, surpassing expectations and signalling that its manufacturing-led turnaround strategy is gaining traction.
BIMB Research pointed to stronger approved products purchase list deliveries and a 21% rise in manufacturing profit before tax as early evidence that the group’s transformation efforts are bearing fruit.
Looking ahead to the second half of 2026, the research house expects several catalysts to support further sector growth.
