HEALTHCARE

OPPORTUNITIES IN MALAYSIA

Overview and Future Trends

Overview of the Malaysian Healthcare Industry
 Malaysia is an upper-middle-income economy with the third highest purchasing power per capita ASEAN. Malaysia’s
healthcare expenditures are expected to double to $28 billion by 2028.
 Malaysia has a two-tier healthcare system: public (universal care) and private. Access to quality healthcare and social
welfare protection is the central theme of the 2020 national budget. In Malaysia’s 2020 annual national budget,
approximately $7.3 billion (10 percent of the total) is allocated to public healthcare, including funds for a holistic public-
private electronic medical record system with RM31 million (US$7.4 million) allocation for 2020. Out of that sum, RM2.9
billion (US$690million) is set aside for development, maintenance, and upgrading work of existing public healthcare facilities,
the procurement of medical equipment and medicine.
 Although Malaysia’s public-to-private healthcare consumption ratio is almost equally distributed, spending is shifting to the
private sector. This shift is spurred by the development of mid-tier to high-end private hospitals and clinics to support both
the domestic market as well as the Malaysian government’s increased focus on attracting medical tourism.
 Basic health screening is the typical first experience a health tourist has with the Malaysian private healthcare providers.
From there, these medical tourists would advance to the next level of care, depending on needs. Towards this, the health
tourism industry as a whole has set priority focus areas in cardiology, oncology, fertility treatment, and hospital partnerships.
 Aesthetics medicine is gaining market interests. Aesthetics medicine involves surgical and non-surgical procedures to alter
the skin, facial, and body contour condition of a patient.
 Pre-hospital care such as ambulance services and Accidents and Emergencies (A&E) services will also be a key focus area.
In Malaysia, ambulance service is mostly provided by Non-Profit Organizations and smaller for-profit organizations. It is
mostly a public-private partnership format. Specific to funding to increase the number of ambulance services, RM59 million
(US$14 million) was set aside for this initiative. A separate RM319 million (US$76 million) is set aside to build or upgrade
public primary care health and dental clinics. These new clinics will be set up in smaller towns. Other hospital development
and construction includes a pathology laboratory and a cardiology center.
 In Malaysia, only private healthcare providers are allowed to cater to health tourists.

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FDIs into Malaysian Healthcare Industry 2012 - 2021
2012 2013 2015 2017 2018 2019 - 2021

Biocon Limited B Braun Medical Oncogen Pharma Ansell Global Cardinal Health Investments into
Set up Asia’s largest Industries Sdn Bhd (Malaysia) Sdn Bhd Training Center Malaysia 211 Sdn Private Healthcare
integrated insulin Set up Asia’s largest Research, (Malaysia) Sdn Bhd Bhd 1. Hong Leong and
manufacturing facility international medical development and Global Procurement & Set up Asia’s largest TPG taking over
at Johor Biotech device procurement manufacturing of oral Trading Center and Regional Distribution Columbia Asia
Park center solid dosage, Principal Hub-Medical Center for Medical Hospitals
lyophilized and liquid device Devices
injectable for 2. Mistsui & Co via
Hovid Berhad oncology products PENTAX Medical IHH acquired Prince
Pharmaceutical products Halyard Malaysia Sdn (Penang) Sdn Bhd Court Medical Center
in the form of tablets Bhd Endoscopy and
Principal Hub-Medical peripheral products 3. Greenwood Capital
Fresenius Medical Care Thomson Medical Device
Production Sdn Bhd Sdn Bhd (GIC Singapore)
Regen Rehabilitation invested in Sunway
Haemodialysis Development of Tawau Specialist Sdn Sdn Bhd
concentrates, pentoneal Private Hospital Healthcare
Bhd Haemodialysis
dialysis solutions and Private Hospital Ambulatory Care
automated dialysis Centre
solutions
Haemonetics Malaysia B Braun Medical Kesington Green
Sdn Bhd Industries Sdn Bhd Specialist Centre
Whole blood devices and Medical devices, Private Hospital
apheresis devices pharmaceutical sterile
intravenous (IV)
Abio Orthopedics Sdn solutions, surgical Island Hospital Sdn
Bhd instrument and implant Bhd
Surgical instrument, Development of
external fixation devices, Private Hospital
internal fixation devices,
artificial joints and dental
implant orthopaedics

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Healthcare Expenditure in Malaysia

Healthcare Expenditure as part of GDP

Note: Latest report released by KKM is up until 2017

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Leading Subsectors for Growth
Wellness
 More Malaysians are taking the approach of wellness and disease prevention rather than treatment.
 Consumer medical devices are used to self-monitor one’s health condition to maintain optimal health.
 Blood glucose and pressure monitors, and digital health wearables are gaining popularity.

Dental
 Currently there are subspecialties such as orthodontics, implant, and esthetic procedures increasingly being offered in private dental clinics.
 Dental healthcare will continue to be a driver or growth in the coming years.

Private Healthcare Services

 Predominantly used by the upper-middle to the affluent segment of the population.
 As per capita GDP rises, demand for private healthcare consumption is expected to increase in tandem.
 Health screening is increasingly popular and is usually the first line of service requested by medical tourists.
 Medical aesthetics procedures, especially the non-invasive treatments are gaining wider acceptance both by local consumers as well as medical
tourists.
 Cardiology, oncology, fertility treatment, and specialist hospital partnerships are key opportunities

Senior Assisted Living/ Home Care Services/ Other care services

 Demand is increasing for quality and affordable care.
 While there are many standalone private old folks homes in Malaysia, with a small number publicly funded, by and large, the standard of care is not
uniformly regulated and provided.
 The market trend is to establish senior assisted living near the vicinity of a healthcare facility for ease of monitoring and care provision.
 Any digital devices, solutions, or systems such as digital monitoring systems for the senior care segment of the population are welcomed.

eHealth
 Consolidation of public healthcare resources and facilities to form cluster hospitals. Hospitals within a similar geographic region will serve as one unit
sharing assets, amenities, and human resources with upgraded facilities.
 Healthcare services to the rural and remote areas will be expanded via mobile healthcare teams and flying doctor services.
 Implementation of the e-Health strategy will include incorporating existing ICT systems into one system-wide module to improve health data
management and support research and development, and commercialization initiatives.

Traditional and Complementary Medicine

• Working to transform TCM into a professionalized industry
• Malaysia’s vision for TCM to become a RM20 billion economy by 2028.
• TCM deliver greatest ESG values.

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Wellness Trends
When we discuss health, we’re actually talking about wellness. Wellness has overtaken health as the pursuit of physical, emotional, social,
environmental, and spiritual well-being. The search for wellness has created a massive industry that has become known as the wellness
economy.

Age Rejuvenation
Sleep Quality Focus
Nutrition, Aesthetics, Lifestyle,
Therapies, Devices, Circadian lighting
Weight Loss, fitness

Mental Wellness Wellness of Balance

Mental health tech, AI Chatbots Balanced diet, nutrition, work life balance,
exercise and fitness, meditation

Fertility and Maternity

Sharing Meat Alternatives, Healthy
Eating, Nutrition and Diet
Support portals for people
going through fertility Vegan products, sustainable food and
treatments and maternity. eating, nutrition and weight loss
Reproductive assistance.

Convenience is the key to the development of the wellness industry. Accessible, easy to navigate,
time-saving. Taking convenience a step further, consumers expect almost everything to be on-
demand.
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Dental Industry Trends

INCREASED DEMAND AND UTILISATION OF DENTAL HEALTH regardless of socioeconomic

status or personal environment conditions.

Services: Inspection, tooth sealants, cavity removal, root canal, cleaning, dental crowns

AESTHETIC DENTISTRY driving demand of dental procedures and healthcare especially in

urbanized areas and amongst younger demographics.

Services: Tooth bleaching, enamel bonding, dental veneers, invisalign braces, enamel abrasion,
dental implants

DENTAL FUNCTION RESTORATION AND TOOTH RESTORATION is also driving demand from
the more senior demographics.

Services: Dental fillings and restoration (normal, silver amalgam, composite, glass ionomer), dental
bonding, veneers, crowns, bridges and implants

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Private and Ambulatory Healthcare Services
Ophthalmology Services

Health Screening O&G and Fertility

Services Clinics

Physiotherapy
Aesthetics and
and
Dermatology
Rehabilitation

Dialysis Centres Endocrinology

Chemotherapy
Telemedicine
and Cancer Care

Ambulatory and
Outpatient Surgery 8
Assisted Living, Homecare and other Care Services
Assisted Living Homes Homecare/ Domiciliary Care
Living homes or residential areas for Health or supportive care provided by
elderly people which are still active professional caregivers in the
and require minimal senior care on a individuals home.
daily basis, and services include
largely organising essentials and
medications.

Hospice and Palliative Care Nursing Homes

Interdisciplinary medical caregiving Facility for the residential care of
approach aimed at optimizing quality elderly people who do not need care in
of life and mitigating suffering for hospitals but cannot live
people with serious illness. independently.

Inpatient Rehabilitation Centres Confinement Centres

Inpatient rehabilitation centres for the Inpatient rehabilitation centres for the
rehabilitation of patients with various rehabilitation of patients with various
neurological, musculoskeletal, neurological, musculoskeletal,
orthopaedic and other medical orthopaedic and other medical
conditions. conditions.

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Traditional and Complementary Medicine
Acupuncture

As alternative or
Standardising supporting/
and Modernising complementary
treatment

TCM
Conditioning
and
Treatments

Chinese Medical Massage Bone Setting

Applications
Malay herbal medicine General wellbeing
Chinese herbal medicine
Ayurveda
Fertility
Neurology
Orthopaedics
Traditional and Herbal Medicine
Physiotherapy
Dermatology
Aesthetics
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Area of Opportunities

Dental Clinic Chains Ophthalmology

1) Q&M 1) Optimax
2) Smilebay Dental 2) Excelview
3) BP Dental 3) Topvision
4) iCare
5) Smile

Health Screening IVF and Fertility

1) BP 1) Metro IVF
2) Pathlab 2) TMC Fertility
3) Fomema 3) KL Fertility
4) Qualitas 4) Sophea

Aesthetics and Dermatology TCM Treatment Clinics

1) KO Specialist Clinic 1) 1TCM Acupuncture

2) Consolidation of aesthetic 2) Xi Fertility
chains: - 3) MG TCM
• Premier 4) GHHS TCM
• DaVinci
• Clique

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Market Outlook – Aesthetics and Dermatology in Malaysia
 Aesthetics and dermatology is trending in Southeast Asia including Malaysia, Thailand, Singapore, Indonesia and Philippines has drawn much
attention in terms of obtaining investments in existing businesses and for the new set up of aesthetics and dermatology chains.
 However, there has been impact from the COVID-19 pandemic on this sector as people tend to be more worried about obtaining treatments that
requires close contact with the medical professionals.
 The setup of medical aesthetics outlets makes them more amenable to deal with social distancing in the post-lockdown world than most retail
business models. There should be a robust bounce back in the beauty-related spending, but aesthetic and dermatology centres would need to
ugrade their sanitation processes to provide peace of mind and avoid infections.
 With the recovering economy, significant uplift should be expected not only from recovering and rising incomes, but also from increasing proportion
of income spent on aesthetics as shown below.
 Greater access to facilities and clinics, as well as, increased products and services on the supply side, and the increased acceptance of aesthetic
procedures are key drivers to growth. In Thailand, growth not only come from the female segment but increased spending for men between 18 – 35
years old of age. This trend would follow suit in other emerging Southeast Asian markets.

Key Drivers for Industry Growth

Supply Demand

Increased customer
Expansion of clinics
penetration

Marketing and
Promotional Product adoptation
Campaigns
Technology Customer visit
Improvements frequency

Average Spending per

visit

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Selected Opportunities – Aesthetic and Dermatology
 Established since 1997 as a dermatology clinic
 Evolved to become a chain of skin specialist clinics with more than 30 chains nationwide.
 Offers one of the most complete range of services in relation to skin laser therapy in the whole of
Asia.
 Today the chain offers the following services to clients:
Face Hair Skin Body Cosmestic Surgery
Acne, Scar, Pores, Eyelids, Eyebags and
Laser Hair Removal Eczema and Psoriasis Excessive Sweating
Rosacea Eyebrows

Aging Skin Hair loss treatment Birthmark and Tattoo Stretch Marks Nose & Chin

Pigmentation, Uneven Skin Pigmentation, Uneven Skin Fat and Cellulite

Breast Surgery
Tone Tone & Mole Reduction
Rehyrdation Brightening Hyperthropic and Keloid Scars Weight Loss Fat Injection

Dark Circles Varicose and Spider Veins Tummy tuck

Gynaecomastia

Women Surgery

 The chain has the following outlets throughout Malaysia (total 34):
1) 11 branches in Selangor
2) 6 branches in Johor
3) 5 branches in Kuala Lumpur
4) 2 branches each in Penang, Sabah and Sarawak
5) 1 branch each in Kedah, Kelantan, Melaka, Negeri Sembilan, Pahang and Perak

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Market Outlook – Aged Care
 Population aging is an inevitable issue especially with the current demographic trend of increasingly smaller family units and a higher
participation in the labour force among women as the rate of urbanization increases, the younger generation with double income family
will lead to an increase in the number of people seeking the services of a senior nursing home for their elderly parent.
 Malaysia elderly care is expected to gain market growth in the forecast period of 2020 to 2027. The market is growing with the CAGR
of 5.5% in the forecast period of 2020 to 2027 and expected to reach USD 3,830.59 million by 2027. The increasing aging population
and the rising awareness of home care services in Malaysia are the main factors for the Malaysia elderly care market growth.
 According to the census, 2017 World Population Prospects report, in Malaysia the number of persons aged 60 years or older in 2017
was 19.20 million and number of persons aged 60 years or over in 2050 will be 29.31 million.
 In addition, many nursing homes and care centres provided in the market do not meet the quality and standard of care expected.

Malaysia: Percentage of population aged 65 and over

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Selected Opportunities – Aged Care
 Leading elderly care group in Singapore and Malaysia, with presence in Chongqing, China.
 Established Malaysian aged care operations with the opening of its Pudu Nursing Home in
2004.
 Further expanded in Malaysia with the opening of its Taman Perling Medicare Center in Johor
Bahru.
 Expanded further in the Klang Valley with the opening of the Puchong Medicare Center and
Nursing home in 2020.
 Key services that the group provides include:
1) Nursing Home
2) Home Care
3) Day Care
4) Rehabilitation
5) Traditional Chinese Medicine
6) Senior Activity Centre
7) Caregiver training
8) Specialised care for the elderly or patients with: Dementia, Parkinson’s Disease, Stroke, Cancer and Palliative Care

 The group has 3 centres in Malaysia, more than 10 centres in Singapore and 1 centre in China.

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Market Outlook – IVF and Fertility Clinics
 The Asia-Pacific IVF Services Market was valued at $6,243.38 million in 2020, and is expected to reach $13,509.30 million by 2028,
registering a CAGR of 10.1% from 2020 to 2028.
 The forecasted growth is mainly driven by the rise in infertility rate, increase in trend of late pregnancies, surge in IVF success rate,
and rise in disposable income in the region.
 Malaysia is one of the key destinations for medical tourism when it comes to fertility treatments. Amongst the most popular treatment
sought is in the area of Assisted Reproductive Technology (ART) where Malaysia records a 65% success rate for its In-Vitro
Fertilization (IVF) treatment, compared to the global average rate of 50%.
 One key driving factor is the policy change in China, where the one child policy was relaxed in October 2015 to allow two child per
family. Further to that, China has relaxed its policy in May 2021 to allow 3 children per household.
 Another driving factor for growth in this segment is also from the falling child birth rates in Malaysia as couples in urbanised areas tend
to choose career over starting a family until a much advanced age. This coupled with the environmental factors such as unhealthy
lifestyles and food consumption, to factors such as air and water pollution that caused reproductive systems to deteriorate.
 However, COVID-19 has impacted the IVF business largely due to reduction in medical tourists. Reduced disposable income and
consideration of overall safety issues during the pandemic is also another factor that has limited the amount of new treatments being
done.
 Nevertheless, the industry still see robust demand especially amongst couples which are more advanced in age, and the industry is
expected to recover and rebound sharply post pandemic.

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Selected Opportunities – IVF and Fertility

 Founded in 1999 with its first center in Klang and delivered its first IVF baby in 2000.
 Expanded to various parts of the Klang Valley and later to Puchong and Melaka.

 Services provided include:

a) Fertility assessment
b) Ovulation induction
c) Semen analysis
d) Intrauterine Insemination (IUI)
e) In-Vitro Fertilisation
f) Intracytoplasmic Sperm Injection
g) Sperm, egg, oocyte and embryo freezing
h) Frozen embryo transfer
i) Blastocyst culture
j) Sperm and egg donation
k) Assisted hatching
l) Pre-Implantation Genetic Diagnostic / Screening
m) Endometrial Receptivity Analysis
n) Surgical Sperm Retrieval
o) Obstetrics and gynaecology
p) Health Screening
Success rate of procedures

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Market Outlook – Dental Clinic Chains in Malaysia
 Dental clinics has proven to be resilient, even during the Covid-19 pandemic. Most dental clinics experienced reduced revenues during
the lockdown period but quickly regain their lost ground during the recovery periods.
 Dental clinics in Malaysia still lags behind other more developed countries at 3.1 dental clinics per 10,000 population. This number is
expected to grow with increased urbanisation as well as increased recognition of the importance of oral and dental health in the
country.
 The business model of dental clinic chains enables dentists to concentrate on core duties and leverage on the firm’s strong branding to
attract patients whilst the franchisor can assist in the administration and marketing of the clinic’s business.
 The same model would allow the chain to add more dental clinics at strategic locations to grow and strengthen their market position.
 Going forward, dental chains can latch on to potential accretive M&A to accelerate growth and the expected recovery post covid
situation should bode well with dental clinics in Malaysia as dentistry is also a sector to benefit from medical tourism.

Dental Clinics per 10,000 population

Israel 11.6
Germany 8.6
Japan 8.0
New Zealand 6.3
USA 6.1
Australia 6.0
UK 5.3
Canada 5.2
Switzerland 5.1
South Korea 5.0
China 4.5
Singapore 4.1
Malaysia 3.1
0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0

Source: World Heath Organisation

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Selected Opportunities – Dental Clinic Chains
Operates more than 30+ dental clinics in Malaysia covering Central and Southern regions:

1) Puchong, Petaling Jaya 14) Seri Kembangan, Selangor 27) Bukit Gambir, Tangkak, Johor
2) USJ, Subang Jaya 15) Sri Hartamas, Kuala Lumpur 28) Ulu Tiram, Johor
3) SS2 Petaling Jaya 16) Semenyih 29) Muar, Johor
4) Raja Chulan Kuala Lumpur 17) Masai, Johor 30) Batu Pahat, Johor
5) Sri Petaling, Kuala Lumpur 18) Taman Molek, Johor 31) Tangkak, Johor
6) Kepong, Kuala Lumpur 19) Nusa Bestari, Johor 32) Yong Peng, Johor
7) Cheras, Kuala Lumpur 20) Austin, Johor 33) Ayer Keroh Height, Melaka
8) Setapak, Kuala Lumpur 21) Taman Bukit Indah, Johor 34) Bandar Melaka
9) Sri Gombak, Kuala Lumpur 22) Permas Jaya, Johor 35) Batu Berendam, Melaka
10) Klang 23) Kulai, Johor 36) Jasin, Melaka
11) Kajang 24) Kluang, Johor 37) Seremban 2
12) EkoCheras, Kuala Lumpur 25) Perling, JB
13) Taman Putra, Ampang 26) Taman Sentosa, JB

Operates 7 dental clinics both on mainland and island Penang:

1) Raja Uda 5) Bayan Lepas
2) Juru Sentral 6) Bayan Baru
3) Tanjung Tokong 7) Air Itam
4) Prai

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Market Outlook – Health Screening in Malaysia
 Health screening is a strategy employed to look for as-yet-unrecognized conditions or risk markers in relation to illnesses in an
individual. Persons tested may not exhibit any signs or symptoms, or may exhibit one or two symptoms which does not tantamount to a
definitive diagnosis.
 Screening are designed to identify conditions which at some future point turn into disease, thus enabling earlier intervention and
management of any potential disease.
 With new airborne pathogens and communicable diseases such as COVID-19, health screening has become ever more important with
tests for COVID-19 being a key revenue stream going forward. Data has shown that the COVID-19 pandemic has increased health
awareness and also increased the enrolment to insurance coverage packages in Malaysia.
 Some of these insurance packages come with annual allowance for medical check up, and medical check up and health screenings
are also a pre-requisite to be able to enroll in such insurance schemes.
 However, the COVID-19 pandemic also has its downside to the health screening industry. The once stable revenue source from the
health screening of foreign workers has been temporarily affected as hiring of foreign workers has been temporarily halted.
 Going forward, the catalyst for growth for health screening would be from the increased urbanization and awareness of the importance
of health screening, and also the potential threat from prevailing strains of COIVD-19 viruses in the community.

Life insurance outlook in Malaysia:

Leading indicator of health awareness and medical
screening

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Selected Opportunities – Health Screening
 Established since 1974 in Malaysia PATHLAB group of companies has been providing its services
to the medical fraternity and the general public.
 PATHLAB has been growing in tandem with the progressive healthcare industry of the region and
is one of the largest medical testing groups in South-East Asia, with more than 70 operations in
Malaysia, Singapore, Thailand, Indonesia, Hong Kong and Cambodia.

 Key services that the group provides include:

1) Health Screening
2) Blood Test and Allergy Tests
3) Medical Check-Up
4) Medical Laboratory

 The group also distributes Solar Ray nutraceutical products in Malaysia.

 The group has branches in the following areas in Malaysia:

1) Kuala Lumpur: Bangsar, Kepong, Pudu, Pandan Indah, OUG
2) Selangor: Petaling Jaya, USJ, Klang, Mahkota Cheras, Damansara Utama, Puchong, Kajang
3) Kedah: Sungai Petani, Alor Setar
4) Penang: Penang Island, Bukit Mertajam, Butterworth
5) Perak: Taiping, Ipoh, Setiawan, Teluk Intan
6) Negeri Sembilan: Seremban
7) Melaka: Taman Melaka Raya
8) Johor: Muar, Segamat, Johor Bahru, Johor Raya, Batu Pahat, Kluang, Nusa Bestari, Kulai
9) Pahang: Kuantan, Mentakab
10)Terengganu: Kuala Terengganu
11) Kelantan: Kota Bahru
12)Sabah: Sandakan, Lintas
13) Sarawak: Kuching, Miri, Sibu, Bintulu

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