The healthcare sector is set for significant advancement driven by medical tourism and the expanding aging population, with revenue projections reaching RM39.5 billion in CY24 and up to RM52.7 billion by CY29, as reported by MIDF Amanah Investment Bank (MIDF). The integration of AI-based medical technology, supported by the AI Roadmap 2021-2025, is expected to enhance healthcare services and innovation, despite challenges in data security and system compatibility.

The bank maintains a POSITIVE outlook on the healthcare sector, recognising the sector's strong fundamentals and growth potential. The bank highlights ongoing investments in AI medical technology and government initiatives, such as the allocation of RM20 million for establishing Malaysia's first AI faculty, as pivotal for future developments.

KPJ Healthcare Bhd has been given a BUY rating by the analyst, with a target price of RM2.54, reflecting its impressive 1Q24 earnings growth and high medical tourism revenue. Similarly, IHH Healthcare Bhd is also rated BUY, with a target price of RM7.35, owing to its robust balance sheet and broad international presence.

The sector's growth is underpinned by increased demand for healthcare services and advancements in medical technologies, particularly AI-based innovations.