KUALA LUMPUR: Alpha IVF Group Bhd's prospects remain bright due to the anticipated growth in medical tourism.
Fertility treatment is the 11th most sought-after treatment for healthcare travellers in Malaysia due to its high success rate and relatively low cost.
Hong Leong Investment Bank (HLIB) said this positions ALPHA to capitalize on the seasonally strong influx of foreign arrivals in the second half (2H) of the of the calendar year 2024 (CY24).
The bank said Alpha will also benefit from the anticipated robust growth of healthcare tourism in Malaysia over the long run, as medical tourism revenue is projected to grow from RM1.3 billion in 2022 to RM5 billion by 2030.
"Given that Alpha boasts a superior pregnancy rate and success rate of up to 87.5 per cent, compared to regional peers' rates of 46.6-72.5 per cent, its outstanding track record allows the company to attract a continuous influx of foreign tourists seeking fertility care specialties.
"Notably, 47 per cent of Alpha's nine months of financial year 2024 (9MFY24) patients are foreigners, with Indonesians accounting for 72 per cent of this segment," it said.
Furthermore, HLIB said Alpha will benefit from rising demand for fertility treatments as women are choosing to have children later in life.
In Malaysia, similar to Singapore, the mean childbearing age has risen steadily from 29.5 years in 1970 to 31 years in 2022.
This trend is expected to continue due to higher education levels and greater workforce participation among women.
HLIB said this shift creates a favourable market for its assisted reproductive services (ARS) segment.
"With the share price currently trading below its initial public offering (IPO) price of RM0.32 and stronger earnings anticipated by consensus going forward, we believe the risk-reward ratio for Alpha is attractive.
"Technically, Alpha is trading in a strong support region of 30 sen to 31 sen. Cut loss at 28 sen," it added.
