Singapore’s healthcare spending to reach $32b by 2020: report

Spending per capita will reach $3,916 in a few years.

The country’s aging population is working to the advantage of healthcare companies. According to independent research firm Business Monitor International, Singapore’s health spending is forecasted to grow at a compound annual growth rate of 8.8% from S$17.8b in 2013 to $32.0b in 2020.

Similarly, health spending per capita is projected to increase at a 4.3% CAGR from S$2,918 to S$3,926 during the same period.

According to OCBC, these figures are pushing healthcare companies to continue their expansion plans to leverage on this positive long-term outlook.

“We believe secular trends such as an aging population and better health awareness will underpin demand for higher quality healthcare services and products. Notwithstanding the robust secular fundamentals, we believe near-term risks to the sector include an outbreak of the Ebola pandemic, softening medical tourism receipts given the strong Singapore dollar and weaker economic growth in the region,” noted the report.

Here’s more from OCBC:

Under our coverage, Raffles Medical Group’s (RMG) 8.5% YoY growth in its 2Q14 PATMI to S$15.6m met our expectations.

On the contrary, Biosensors International Group continued its lacklustre earnings trend, posting a 18.4% YoY dip in its 1QFY15 core PATMI to US$9.9m. This was its weakest performance since 4QFY10 and was also below our expectations.

IHH announced on 12 Sep 2014 that it had entered into a Sale and Purchase Agreement to
acquire a 100% equity stake in Radlink-Asia from Fortis Healthcare Singapore for a sum of S$137m.

Radlink-Asia is involved in the provision of outpatient diagnostic and molecular imaging services in Singapore. China’s recent decision to allow full foreign ownership of hospitals in seven cities would benefit RMG’s plans to expand further in China.