3 Top Singapore Healthcare Stocks to Buy for Long-Term Investors

June 27, 2023

Singapore’s healthcare sector is a key focus for the Singapore government as its population is ageing rapidly.

This has led to robust infrastructure, technological advancements, and a commitment to quality patient care.

As a result, investors looking for long-term investment opportunities may find the Singapore healthcare industry to be an attractive prospect.

Today, I will look at 3 top Singapore healthcare stocks that long-term investors can consider for their investment portfolio.

1. Raffles Medical

Raffles Medical Group Ltd (SGX: BSL) is one of the most recognised names in Singapore’s healthcare industry.

The company operates a network of medical facilities, including hospitals, specialist clinics, and medical centres, both locally and internationally.

Raffles Medical Group’s commitment to delivering high-quality healthcare services, coupled with its strong reputation and steady growth, make it an attractive long-term investment option.

The right-sizing of staffing across its expanded operations in hospitals, clinics and transitional care facility (TCF) in Connect@Changi has helped Raffles Medical Group to effectively manage its costs.

This has been seen via the strong financial performance in FY2022 and improvement in its earnings before interest, tax, depreciation and amortization (EBITDA) margins.

With the company now shifting its focus back to core hospital and healthcare services, it is anticipated that staff costs will gradually revert to historical levels.

Raffles Medical Group’s strong net cash position of S$157.0 million also provides it with ample opportunities for expansion, including exploring adjacent segments in sub-specialty healthcare services across the region.

Additionally, the company’s expansion into China and other regional markets provides investors with exposure to the broader Asian healthcare opportunity set.

2. IHH Healthcare

IHH Healthcare Berhad (SGX: Q0F) (KLSE: 5225) is one of the world’s largest healthcare networks, with 83 hospitals in 10 countries.

The company operates a network of hospitals and medical centres across multiple countries including its home market in Malaysia, as well as Singapore, Turkey and India.

IHH Healthcare’s diverse portfolio and global reach offer investors exposure to various healthcare markets and growth opportunities.

The company aims to achieve its goal of 2,000 new beds over the next three years.

This expansion is expected to drive better profitability, supported by improving bed occupancy rates.

Despite near-term challenges, such as nursing shortages in Singapore and deferred medical treatments in Turkey, IHH Healthcare reported solid underlying core net profit growth.

The resolution of these challenges, along with the anticipated improvement in profitability, is expected to fuel stronger growth.

The company’s focus on patient-centric care, investment in advanced medical technologies, and strategic acquisitions position it well for long-term success.

3. Parkway Life REIT

Parkway Life REIT (SGX: C2PU) is one of Asia’s largest listed healthcare REITs.

The healthcare REIT owns 57 nursing homes and four hospitals and medical centres across Singapore, Japan, and Malaysia.

In its Q1 FY2023 earnings, Parkway Life REIT’s gross revenue and net property income rose by 21.7% and 23.5% respectively.

The higher revenue from its Singapore properties came from new master lease agreements.

Currently, Singapore accounts for around 70% of total sales and NPI for Parkway Life REIT.

The healthcare REIT’s gearing ratio stood at only 37.5% despite the additional capital expenditure funding required for its Singapore hospitals.

All-in interest cost is also at a low level of 1.19% with about 78% of its debt hedged into fixed rates.

Investors looking for stability will find Parkway Life REIT to be attractive, backed by its defensive income structure.

Opportunities to invest in Singapore’s thriving healthcare sector

Investing in Singapore healthcare stocks can offer investors a unique opportunity to tap into the country’s thriving healthcare sector.

Raffles Medical Group, IHH Healthcare and Parkway life REIT have all demonstrated consistent growth, strong market positions, and a commitment to providing quality healthcare services.

While it is essential to conduct thorough research and consider various factors before making any investment decisions, these stocks present compelling long-term investment prospects for individuals interested in the Singapore healthcare industry.

As always, it is advisable to consult with a financial advisor before making any investment decisions to ensure what you’re buying is aligned with your financial goals and risk tolerance.

Disclaimer: ProsperUs Investment Coach Billy Toh doesn’t own shares of any companies mentioned.

Billy Toh

Billy is deeply committed to making investment accessible and understandable to everyone, a principle that drives his engagement with the capital markets and his long-term investment strategies. He is currently the Head of Content & Investment Lead for Prosperus and a SGX Academy Trainer. His extensive experience spans roles as an economist at RHB Investment Bank, focusing on the Thailand and Philippines markets, and as a financial journalist at The Edge Malaysia. Additionally, his background includes valuable time spent in an asset management firm. Outside of finance, Billy enjoys meaningful conversations over coffee, keeps fit as a fitness enthusiast, and has a keen interest in technology.

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