ALPHA: Set to charge ahead

First sales office in China. On Sep 13, ALPHA officially launched its first representative office in Shanghai. The move will create a direct pathway for Chinese patients, streamlining access to ALPHA’s fertility treatments while cutting out the logistical complexities and intermediary costs tied to agent-based referrals. Historically, ALPHA's Chinese clientele came primarily through agents, with fees paid for each transaction. Additionally, the expected rise in Chinese patients is highly advantageous to ALPHA, as this demographic typically opts for more premium add-on services than local patients. In the near term, we gather that ALPHA is set to open one additional sales office to further expand its presence in China.

Riding on the anticipated growth in medical tourism. Fertility treatment is one of the most sought-after treatment for healthcare travellers in Malaysia due to its high success rate and relatively low cost. This positions ALPHA to capitalize on the seasonally strong influx of foreign arrivals in the 2HCY24 and the anticipated robust growth of healthcare tourism in Malaysia over the long run, as the medical tourism revenue is projected to grow from RM1.3bn in 2022 to RM5bn by 2030.

Fertility treatment – A solution that modern society needs. The demand for fertility treatments is increasing 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, and this trend is expected to continue due to higher education levels and greater workforce participation among women. This shift creates a favorable market for Assisted Reproductive Services (ARS) segment. Notably, a woman’s most fertile years are between her late teens and late 20s, with fertility declining significantly after age 30. Furthermore, Malaysia’s government has introduced supportive incentives, such as tax relief and EPF healthcare withdrawals, making fertility treatments more accessible to the general population.

Higher formation. ALPHA is currently trading at its uptrend support channel of RM0.345-0.355 region, with on the mend indicators. A successful breakout above RM0.37 will spur the share price toward RM0.385-0.390-0.400 region, creating a higher high formation. Cut loss at RM0.33.

Collection range: RM0.345-0.350-0.355

Upside targets: RM0.385-0.390-0.400

Cut loss: RM0.330

Source: Hong Leong Investment Bank Research - 18 Oct 2024