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hares of hospital chains have performed well on the Indonesian Stock Exchange (IDX) in recent weeks as greater awareness about the importance of a healthy lifestyle is expected to further improve their business prospects, analysts said.

Between March 23 and April 3, the share prices of healthcare providers recorded a significant increase. PT Siloam International Hospitals Tbk’s share price, for example, gained 23.89 percent. Meanwhile, PT Medikaloka Hermina Tbk rose by 12.10 percent, PT Mitra Keluarga Karyasehat Tbk by 11.29 percent and PT Ciputra Development, which owns Ciputra Hospitals, by 8.65 percent.

The hospital stock price increases were in line with a sharp rise in the Jakarta Composite Index (JCI), which rallied 15.89 percent during the same period.

Artha Sekuritas Indonesia vice president Frederik Rasali said in Jakarta on Monday that the healthcare sector, which trades under the “trade and service sector” on the IDX, had always been an attractive sector for investments as the potential demand was quite high while the supply side was still lacking.

Based on the IDX’s most recent weekly statistics, which summarizes data from March 30 to April 3, the trade and service sector gained 2.74 percent throughout the week, higher than the JCI’s gain of 1.71 percent.

Mirae Asset Sekuritas Indonesia, a brokerage firm, recommended the shares of a hospital company for this month’s purchase, as written in its “Monthly Strategy” report published on Monday, among seven other recommendations.

The brokerage firm listed PT Mitra Keluarga Karyasehat Tbk, which trades on the IDX with the code MIKA, as one of its top picks for April, noting that since its inception in August 2019, Mirae’s top picks had outperformed the JCI by 25.4 percent.

Aditya Widjaja, investor relations at Mitra Keluarga, told The Jakarta Post on Monday that the hospital had seen a decrease in the number of outpatients, those who received medical treatment without being admitted to the hospital, over the past 10 days. He explained that the COVID-19 outbreak had discouraged people from seeking medical treatment unless the problem was urgent.

Analysts said that despite people’s apprehensions, increasing awareness among the middle class on the benefits of a healthy lifestyle further improved the long-term prospects of healthcare businesses.

Mitra Keluarga Group has 24 hospitals under its wing, 16 of which operate under the Mitra Keluarga Hospital brand and eight as Kasih Hospital managed by PT Rumah Kasih Indonesia, which the group acquired in 2017. This year, Mitra Keluarga is planning to add one more hospital by the fourth quarter, despite several obstacles caused by the pandemic.

“The challenge is still classic. For the health industry, up to now, we have difficulty in the supply side, especially for the supply of doctors,” Aditya said when asked about the challenges the industry was facing, adding that the distribution of doctors among regions was still unequal, with most still concentrated in big cities.

Indonesia’s health spending is lower than its regional peers and grows at a lower rate as well. Indonesia’s current health expenditure (CHE), which measures spending on healthcare goods and services, stood at 3.12 percent of the country’s total GDP in 2016 or a 3.96 percent increase from the previous year.

The average spending of ASEAN members was at the level of 4.10 percent in 2016. Singapore, for example, a neighbor to Indonesia that has become a medical tourist destination for the Southeast Asian region and the Indonesian upper-class, spent 4.47 percent of its GDP on health-related expenses in 2016, a 6.70 percent increase from the year prior.

Opportunities for growth in the health sector in Indonesia appear vast as the global CHE was documented at 10.02 percent in 2016, more than triple than that of Indonesia’s. A 2019 global report by the World Health Organization titled “Global Spending on Health: A World in Transition”, notes that the healthcare sector will grow alongside the economy, even with economic turbulence.

There seems to be a large untapped potential to benefit from the healthcare industry as it matures because currently, a segment of Indonesian people still chooses to spend on healthcare abroad than in the country.

Industry players are eager to enter the healthcare sector as evidenced by the rapid increase in the number of major hospital chains in the country in recent years.

Mayapada Group, which founded Bank Mayapada in 1989, opened Mayapada Hospital in 1991, which is now managed under PT Sejahteraraya Anugrahjaya Tbk. The diversified Lippo Group built Siloam Hospitals in 1996.