Opportunities & Risks in the Healthcare Sector Amid Pollution and Extreme Weather

Deteriorating air quality—driven by vehicle emissions, coal-fired industrial pollution, construction dust, and open burning of waste and land—has become an increasingly serious issue^[1]. The formation of secondary aerosols and unfavorable meteorological conditions further intensify the accumulation of pollutants in the atmosphere. As a result, cases of acute respiratory infections, asthma, bronchitis, higher lung cancer risk, and cardiovascular diseases continue to rise across communities^[2].

These conditions create investment opportunities in the healthcare sector, as demand for medicines, vitamins, and health supplements increases, particularly during periods of extreme weather. Rising healthcare consumption has led to higher demand for medical products and services. Increased patient visits also boost hospital operational activity, becoming a key factor for market participants when assessing the short-term outlook of healthcare stocks.

The Healthcare Sector in the Long-Term Investment Landscape

Beyond rising demand for quality healthcare services, the healthcare sector continues to expand through digital transformation, including telemedicine platforms, advanced surgical technologies, and AI-powered medical devices. These innovations aim to address major challenges such as accessibility and infrastructure gaps, enabling faster, more accurate, and affordable healthcare services, especially in regional areas (suburbs).

One of the most attractive opportunities lies in the pharmaceutical industry, which continues to draw investor interest. The pharmaceutical market is projected to reach US$ 11 billion by 2025, while the telemedicine sub-sector is expected to grow at an annual rate of 25% through 2027^[3].

Indonesia’s pharmaceutical industry plays a vital role in supporting the national healthcare system. Major companies such as Kalbe Farma (KLBF), Kimia Farma (KAEF), and Sido Muncul (SIDO) not only meet domestic demand but also expand their reach into international markets. The government actively encourages the production of local generic drugs and vaccines to reduce reliance on imports.

Meanwhile, the hospital industry offers significant potential through public–private partnerships. Listed hospital operators such as Mitra Keluarga (MIKA), Siloam (SILO), and Hermina (HEAL) represent key players in Indonesia’s healthcare ecosystem. Investment in advanced medical equipment and healthcare technology is also gaining momentum. In 2025, Diastika Biotekindo (CHEK)—a company specializing in medical and laboratory equipment solutions—conducted its initial public offering (IPO).

Key Challenges in the Healthcare Sector

Despite its promising long-term prospects, the healthcare sector faces several challenges, including evolving regulations and disparities in healthcare service quality across regions. These factors can significantly impact a company's performance and expansion strategies, making them critical considerations for investors.

On the other hand, rising health awareness, the growth of the middle class, and supportive government policies continue to strengthen the appeal of the healthcare sector for long-term investment. Through careful analysis of business models and regulatory risks, healthcare stocks can serve as a strategic option for diversifying a portfolio.

Reference:

^[1] Kementerian Lingkungan Hidup, "Jabodetabek Alarm Polusi: KLH/BPLH Bergerak Serentak, Tak Ada Ruang Bagi Pencemar Udara", KLH/BPLH, 3 Juni 2025.

^[2] Nafiysul Qodar, "Kualitas Udara Jakarta Senin Pagi 30 Juni 2025 Terburuk ke-2 Dunia: Waspada Dampak Buruk!", Liputan6, 30 Juni 2025.

^[3] Sherin George, "Healthcare’s Pivotal Moment: Mid-year 2025 Checkpoint for Growth, Innovation, and Resilience", Frost & Sullivan, 26 Agustus 2025.

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Disclaimer: The content is made for educational purposes, not a recommendation to buy or sell a particular stock. PT KAF Sekuritas Indonesia is licensed and supervised by the Financial Services Authority (OJK).