Is the Asian Healthcare Sector Ripe for Investment?

The Asian healthcare sector presents a viable opportunity for PE (private equity) because of strong growth initiatives, open regulatory environment and growing deal flow opportunities. However, investors should cautiously approach the market as inflated valuations can prove to be risky. They should search value in specialist provisions instead of targeting hospitals.

Increased prevalence of diseases and aging demographics are increasing the healthcare demand in the region. Public sector of south-east Asian countries including that of China and India isn’t prepared to meet the growing healthcare needs of the people.

Healthcare markets of South-east Asian countries and India are at their own varying stages of development. Each market has its own regulatory systems and distinguishing characteristics. Singapore’s market is mature while Malaysia’s and Thailand’s is developed. India, Vietnam, Philippines and Indonesia are developing while Myanmar’s and Cambodia’s healthcare markets are nascent.

Furthermore, there are different healthcare players in the region ranging from government healthcare provisions to private medical insurance providers. People of the region are willing to pay for quality service and decent healthcare.

Some big public listed companies in the healthcare sector of Asia are attracting investors and maintaining their position as they trade at higher earnings multiples. That has lifted valuation expectations of private companies.