September 27, 2023

The Health Sector Has Growth Potential, Analysts Recommend PEHA Stocks for the Long Term

JAKARTA, September 27, 2023 - Global healthcare costs are increasing at a higher rate than economic growth, where the Indonesian Government is continuously transforming to encourage the public to be more concerned about their health conditions due to the rising medical expenses every year. From a market perspective, the pharmaceutical industry remains consistent in its growth alongside domestic healthcare needs. The National Health Insurance Program (JKN), with its user base exceeding 248 million people, has had a positive impact on the sector.

This was stated by the Head of Research at FAC Sekuritas, Wisnu Prambudi Wibowo, during his presentation at the Investment Talk event: Revitalizing the Healthcare Sector Through the Capital Market in the Society 5.0 Era, on Saturday (16/9). The Omnibus Law on Health has a positive impact due to regulations reducing the import of healthcare equipment and medicines, providing benefits to the domestic healthcare industry.

"If you want to invest, choose a sector that is not too crowded but has good future prospects, such as the healthcare sector. The issuers can be from the Pharmaceutical Industry, Medical Equipment Industry, and Hospitals." Wisnu explained, for example, one of the pharmaceutical issuer stocks, PT Phapros Tbk (PEHA), as one of the issuers consistent in terms of revenue. Phapros has experienced challenging business cycles and also cycles of optimism over the last few decades, meaning it has gone through phases before the pandemic, during the pandemic, and post-pandemic while remaining consistent in its sales.

"PEHA stocks are attractive for the medium and long term and can be an alternative for investors to have passive income compared to other stocks that do not have consistent income. In addition, the government is committed to increasing the allocation of the budget in the healthcare industry to above 30 percent. If you want to invest, PEHA has the potential to gain capital. Based on historical data, PEHA also regularly provides dividends to shareholders every year, reaching up to 70 percent of the company's net profit," he suggested.

In the same opportunity, the Chairman of the Indonesian Capital Market Analysts Association, David Sutyanto, said that the healthcare sector contributes to the third position in growth in Indonesia. With inflation tending to be low, the purchasing power of the public can still increase.

"Health becomes a priority sector, where the average per capita healthcare expenditure for prevention tends to rise, and this increase has a positive impact on the issuers in this industry." The public's spending on preventive efforts, David revealed, is also tending to rise. And this has a positive impact on issuers in the sector.

"Furthermore, green investment will be an interesting investment topic. Currently, investors' choice when investing is whether the issuer contributes to environmental damage or not. The indicator used is ESG (Environmental, Social, and Governance)." As is known, PT Phapros Tbk has made green business one of its policies and standards in carrying out its business processes. This pharmaceutical issuer optimizes technology to maintain environmental sustainability as part of green economics. Phapros has successfully increased company efficiency by 12.9% per year. One of these initiatives is converting solar fuel energy to Compressed Natural Gas (CNG), supported by the use of hydrocarbon-based cooling machines (chillers) and solar panels.

Additionally, Phapros is committed to reducing water consumption by treating wastewater for reuse in laundry needs, waste reduction and utilization, hazardous waste management, reducing water and air pollution loads.

As evidence of Phapros' commitment to green business and sustainability, Phapros has received the Green PROPER from the Ministry of Environment and Forestry 8 times since 2012 – 2020.