AmInvestment Bank Bhd (AmInvest) believes Pharmaniaga Bhd will be a major distributor of the Covid-19 vaccine to local hospitals and will appoint other companies to help distribute the vaccine nationwide.
"In this regard, we believe Apex Healthcare Bhd will benefit from its strong distribution network and previous excellent track record in the distribution of vaccines and other pharmaceutical products," he said in a research note today.
In terms of bottling companies, according to AmInvest, although the agreement on the Covid-19 vaccine bottling process has not been realized, the government is seen choosing Duopharma Biotech Bhd and Pharmaniaga to carry out this process.
Bernama reports that so far, Pharmaniaga has signed an agreement with Serum Institute of India Pte Ltd to carry out the bottling process for pneumococcal vaccines.
The investment bank also believes that KPJ Healthcare Bhd and IHH Healthcare Bhd, as well as other private healthcare providers will play a role in the vaccination program.
“We are of the view that private hospitals and clinics will assist in the Covid-19 Malaysia vaccination program due to cold network facilities, logistics limits and manpower in the public sector.
"We also think that private healthcare providers will receive a fixed payment from the government for their services, although we doubt the operating profit margin will be high as this is a national service," he said.
Despite knowing that the Covid-19 vaccine will be used only after obtaining the approval of the National Pharmaceutical Regulatory Agency of Malaysia (NPRA), the investment bank believes the first batch of vaccines will be given in the second or third quarter of this year.
“NPRA is responsible for ensuring that all products are evaluated and tested well before being registered for the Malaysian market.
"Based on the need for immediate rates, priority assessments will most likely be used for faster approval of the Covid-19 vaccine," according to AmInvest.
Overall, the investment bank maintained an 'overweight' recommendation on the Malaysian healthcare sector.
"Although the recovery in the number of patients seeking treatment is only expected to be modest in this year's projection, the income outlook for the sector is positive.
"This is based on the potential of public-private partnerships, better margins due to cost reduction measures and a focus on low capital expenditure," he added.
In the long run, AmInvest expects a recovery in medical tourism, better public health awareness and an aging population will drive the next level of growth in the healthcare sector.
