22 April 2022

Hospital Stock Outlook Amid the Omicron Wave

The increase in Covid-19 cases since discovering the Omicron variant could be a positive sentiment for hospital stocks. Nevertheless, the profit growth rate of hospital issuers this year is expected to return to normal.

Also Read: BMHS Growth Plan for 2022

CGS CIMB Sekuritas analysts Marcella Regina and Patricia Gabriela said that within three weeks after the long holiday, there was a spike in Covid-19 cases, especially the Omicron variant, with an increase of 15 thousand patients per day since the end of January 2022. Covid-19 cases have reached 27 thousand as of February 3, 2022; this figure is the highest since August 2021.

Meanwhile, the number of people who have been vaccinated has reached 88% of the total population and has reached 100% who have received stage I vaccination. Thus, investment in hospital shares still has good potential.

Potential Hospital Stocks during a Pandemic

According to the results of a review by the Financial and Development Supervisory Agency (BPKP) on hospital claims for reimbursement bills for treating COVID-19 patients in 2020, arrears of bills that meet the formal requirements to be paid are Rp. 2.56 trillion for 909 hospitals, including corrections of more than Rp. Rp 760 billion was paid to 258 hospitals.

Equity Analyst, Kanaka Hita Solvera Andhika Cipta Labora, sees the hospital's performance prospects more optimistically. Andhika assessed that the state budget of Rp 2.56 trillion, or 9.4% of the total state budget, was a manifestation of the government's seriousness to continue to improve the health sector.

In addition, COVID-19 patients and non-covid patients can still have a positive impact on maintaining income. Andhika concluded that the issuers of the hospital during 2022 will be maintained.

Henan Putihrai Sekuritas analyst Jono Syafei also believes that the revenue of hospital issuers this year can still grow. Jono estimates that the contribution from Covid patients will be much less, with an estimate of 25% -30% in 2021, to less than 5%.

Hospital issuers are also predicted to continue to expand organically and inorganically aggressively. With BMHS starting to digitize for business process efficiency, the performance of listed hospital companies has promising potential to continue to grow.

BHMS Stocks Appreciated for Profit

Several companies, including BHMS, have tried various ways to grow the value of hospital shares. One of them is always to evaluate its services to the public so that it can continue to provide convenience.

Another effort is to continue to add medical partners in various regions. The move also attracted high shares of hospitals that entered into deals. Every potential investor should see this development.

Also Read: IMTB : International-Standard Health Agency in Indonesia

Progress Monitoring

The index of health sector issuers is starting to test the highest levels, continuing the trend since August 2021, which continues to rise. Overshadowed by the Omicron variant, health sector stocks are predicted to have still the potential to strengthen.

VP Samuel Sekuritas Indonesia, Muhammad Al Fatih, in the 2nd Session Closing IDX, reminded us that as long as IDX Health is not lower than 1460, the potential is still relatively high.

According to Al Fatih, although there was a slight shock during the interest rate announcement, the handling momentum influenced the increase in health stocks. The potential for the rise was still quite significant. Al Fatih also added that the presence of a booster vaccine could affect the Composite Stock Price Index (IHSG) and issuers in the health sector.

BMHS itself is considered one of the issuers of hospitals with bright prospects. Besides, BMHS already has a strong brand, and many BMHS medical units already have a good track record.

Ciptadana Sekuritas analyst Robert Sebastian himself said that BMHS is one of Indonesia's leading health service providers with a strong track record and expertise in the women and children segment.

Also Read: Construction of RSU Bunda Vida and Acquisition of RS Citra Harapan for Bekasi Medical Services

Read more about hospital stock outlook here, and BMHS' assets here. Check thispage out for BMHS' CSR activities.


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