KUALA LUMPUR: Kenanga Research has maintained a 'neutral' call on the healthcare sector's outlook this year and believes it will continue to enjoy stable growth in Malaysia.
The research house said the industry will be supported by the growing healthcare expenditure, rising medical insurance and aging population demographics.
"The healthcare services sector is considered defensive for its predictability factor and captive earnings streams," it said in a statement today.
However, it said both IHH Healthcare and KPJ Healthcare shares are currently trading at lofty valuations, relative to their net profit growth potential for financial years 2014 and 2015.
Kenanga has maintained its "market perform" call on IHH Healthcare, on a take profit target of RM3.86.
For KPJ Healthcare, it reiterated the "underperform" recommendation with take profit target of RM2.67, opining that both shares are trading at rich valuations, while offering low dividend yields at current levels
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