Research

Healthcare: Attractive And Defensive

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Algo Research Team

Industry | Mar 29, 2023 | Views: 58

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Key Summary:

  • Improving outlook in 2023
  • M&A and consolidation are rising in the sector
  • Light positioning by institutional investors

In 2023, we think healthcare sector can outperform the market as it is rather defensive in the midst of headwinds from the global economy. Historically, when IHSG is trading sideways or bearish, healthcare outperformed as seen in 1Q15-3Q15, 1Q19-4Q19 and 1Q21-3Q21. Note that one reason for the outperformance was due to relatively higher growth against the market, while positive sector sentiment varied across the year; 2019 BPJS-K increased tariffs, 2021 demand from pandemic.


This year, we are seeing similar pattern in terms of growth (healthcare: +15-49% vs. IHSG: +5-7%) combined with several positive structural catalysts like INA-CBG (ASP) hike by +10% and potential sector consolidation through M&A. Therefore, 2023 could be the moment for healthcare to outperform especially since investors' positioning is not yet crowded. Nevertheless, be wary of liquidity as the sector is a small-cap and manage downside risks properly. We like PRDA the most (read our previous note on Dec-22 here), followed by SILO>MIKA>HEAL.

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