Hospitals, pharma firms to benefit from Coronavirus outbreak

Demand for private clinics is sighted to increase as the masses avoid congested public hospitals.

As the Coronavirus outbreak poses increasing threat to Asian countries, the healthcare, pharmaceutical, and medical glove manufacturer firms are sighted to get a boost, said a DBS Equity Research report.

The healthcare services, particularly private clinics, are expected to see an uptick as the general public avoids crowded public health centres.

The SARS outbreak in 2003 saw a similar situation in the healthcare landscape, where admissions to public hospitals, such as in Singapore’s Tan Tock Seng, plummeted, whilst those at private hospitals such as Raffles Medical remained resilient, noted the report.

DBS noted that Indonesia’s largest private hospital chain operators Siloam Hospital and Hermina will gain from the outbreak. Hong Kong-listed pharma stocks such as CTCM and Baiyushan, which produce Chinese medicine products treating pneumonia and diagnostic kits for Wuhan pneumonia, should also see an uptick in demand.

The growing anxiety of the virus amongst the public is expected to result in higher consumption of medical gloves, translating to better earnings for glove makers for Q1 2020. Malaysian glove makers such as Top Glove, Hartalega and Kossan Rubber, and Singapore’s Riverstone should see a boost in glove usage. A prolonged outbreak will also further increase glove shipments, noted the report.