Why healthcare companies keep flocking to China despite headwinds

Raffles Medical is among those that have unveiled big developments.

Challenges have persisted for healthcare companies looking to tap on China for growth, yet this has not deterred further investments into the country but rather, the country has remained an attractive choice for expansion plans.

According to OCBC Investment Research, with a 400-bed hospital in Shanghai’s Pudong New Area already in the pipeline, Raffles Medical Group had announced the development of a 700-bed hospital in Liangjiang New Area of Chongqing, China, which is targeted for completion by 2Q18.

Both hospitals are situated in China’s economic development areas, and the latter could be poised to enjoy a potentially significant addressable patient population given Chongqing’s economic developments and its stance as a major beneficiary of China’s Silk Road initiatives.

Here's more from OCBC Investment Research:

Separately, Q & M Dental proposed a spin-off of its subsidiary based in Liaoning Province, Northern PRC region via the proposed listing of Aoxin Q & M Dental Group, slated for listing on SGX-Catalist on 26 Apr 2017.

Management stated its intention to expand their business amid a ‘rapidly growing’ demand for dental services in Northern PRC.

While Indonesian patients have been a main source of foreign patients for healthcare institutions in Singapore and Malaysia, patients from China could be another important source of patients, particularly for Health Management International (HMI)’s hospital in Malacca, Malaysia.

In view of the planned RM43b Melaka Gateway (venture between Malaysia and China) coupled with other developments such as increasing direct flight routes from China to Malacca International Airport, the potential growth in patients from China augurs well for HMI.

Tapping on new markets has become strategically important for private healthcare companies to sustain growth in the long run, especially against a backdrop of rising competition from both its private peers and local public healthcare institutions.