Overview of Bumrungrad Hospital

Bumrungrad Hospital (BH) remains a leader in Thailand’s premium hospital sector, known for its exceptional capability in treating complex diseases and attracting high-income domestic and international patients. With 580 licensed beds, BH has become a beacon for medical tourism, especially attracting a significant portion of its revenue from international patients.

Financial Performance and Market Dynamics

Despite the hospital’s robust financial foundation, recent market dynamics have posed challenges. The 3Q24 earnings report revealed a net profit of THB1.96 billion, maintaining a flat year-on-year growth. The primary challenge was a 5% decline in revenue, driven largely by a substantial decrease in international patient revenue, specifically a 67% drop from Kuwait and a 37% reduction from the UAE.

The reduction in Kuwaiti patients was attributed to the government’s halt on sending patients abroad, while the UAE’s decline was due to decentralized policies. However, management remains optimistic, expecting a return of international patients due to Thailand’s strong appeal in medical tourism.

Future Revenue Projections and Growth Strategies

Looking ahead, Bumrungrad Hospital’s management has adjusted their earnings forecast for FY24-26E, with a reduction of 5-9% to reflect current international patient trends. Despite this adjustment, the hospital anticipates a 4% CAGR in earnings for FY25-26, driven by a combination of price increases and treatment intensity.

Furthermore, plans for a new 212-bed hospital in Phuket are underway, with an expected opening between late-2026 and 2027. This expansion aims to capitalize on Phuket’s popularity as a tourist destination, potentially enhancing BH’s revenue streams.

Investment Outlook and Valuation

Maybank Securities maintains a ‘Buy’ recommendation for Bumrungrad Hospital with a target price of THB250. The current valuation is deemed attractive for long-term investors, primarily due to BH’s strong pricing power, efficient cost management, and high return on equity (ROE) compared to peers.

The hospital’s strategic focus on high-quality treatments and international patient engagement is expected to support its financial resilience and market position.

ESG Considerations and Sustainability Efforts

On the Environmental, Social, and Governance (ESG) front, Bumrungrad Hospital has initiated several sustainability strategies. These include water management, energy efficiency projects such as solar rooftops, and waste reduction initiatives. While the hospital is still in the process of capturing Scope 3 emissions, it has made significant strides in reducing its carbon footprint.

Socially, BH is committed to community outreach through initiatives like the “ARSA Bumrungrad” mobile clinic, providing free medical services to underprivileged communities since 2001.