Singapore Healthcare Sector - Near-term constraints While we expect a still-healthy Singapore economy to drive robust patient numbers in 2008, we remain cautious about the strengthening S$, which could prompt foreigners to seek treatment elsewhere, while a global shortage of nursing staff could increase operating costs. In addition, medium-term growth could be limited by capacity constraints and land shortages faced by private hospital operators that are operating near full capacity. As such, we downgrade the sector to Neutral from Overweight.
Sector catalysts could come from:
1) the implementation of means testing; and
2) a continuous immigration boom. Our top pick remains Parkway for its growing regional franchise, good earnings prospects and relatively attractive dividend yields.
Quick Takes
- Parkway Holdings (S$3.80) - Multiple growth drivers
- Thomson Medical Centre (S$0.67) - There’s demand, but where’s the space?
- Raffles Medical Group (S$1.53) - Rich valuations News of the Day
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