In-Depth Analysis of Healthcare Giants: BDMS, BH, BCH, CHG, and PR9
Date of Report: December 20, 2024
Broker: Maybank Securities (Thailand) PCL
The healthcare sector in Thailand is experiencing a transformative phase, with significant implications for major players like Bangkok Dusit Medical Services (BDMS), Bumrungrad Hospital (BH), Bangkok Chain Hospital (BCH), Chularat Hospital (CHG), and Praram 9 Hospital (PR9). This comprehensive analysis highlights the financial health, growth prospects, and strategic positioning of these healthcare giants, as detailed in the latest report by Maybank Securities.
Bangkok Dusit Medical Services (BDMS): A Strategic Buy
BDMS, Thailand’s largest private hospital operator, with an expansive network of 59 hospitals, continues to dominate the healthcare landscape. Despite recent stock declines, the report maintains a ‘Buy’ recommendation with a slightly lowered target price of THB31. The anticipated implementation of co-pay policies is expected to have a limited impact, potentially reducing FY25E revenue by only 2-3%. BDMS’s robust branding and extensive network position it well to capitalize on Thailand’s aging demographic.
BDMS’s 4Q24E revenue is projected to grow by approximately 4% YoY, despite challenges from a high base effect due to a previous flu outbreak. The company’s earnings forecast for FY24-26E has been revised down by 3-9%, reflecting a 6% CAGR in revenue growth due to increased competition and co-pay policies. However, BDMS’s valuation at 22x FY25E P/E remains attractive, with a projected 7.4% earnings CAGR in the same period.
Bumrungrad Hospital (BH): Navigating Growth Challenges
BH, a stalwart in Thailand’s healthcare sector, is recommended as a ‘Buy’ with a target price of THB250. Despite facing a downturn in revenue from UAE patients by 20-37% YoY, BH continues to demonstrate resilience. The stock’s forward P/E ratios for FY24 and FY25 stand at 19.6 and 18.8, respectively, highlighting its solid financial footing. BH’s high ROE and consistent dividend yield further underscore its investment appeal.
Bangkok Chain Hospital (BCH): Holding Steady Amidst Market Volatility
BCH receives a ‘Hold’ recommendation, with a target price of THB18.5. The company faces challenges with a projected negative EPS growth of -8.8% in FY24, although an expected recovery of 10.4% in FY25 offers some optimism. BCH’s focus remains on maintaining a steady market presence amidst fluctuating demand and competitive pressures.
Chularat Hospital (CHG): Positioned for Growth
CHG is recommended as a ‘Buy’ with a target price of THB3.5. The hospital chain is poised for growth, driven by a 14.1% EPS increase in FY25. Its strategic initiatives in expanding healthcare services and facilities align with the growing demand from mid-to-high income segments. CHG’s projected EPS CAGR of 12.4% through FY24-26E indicates strong forward momentum.
Praram 9 Hospital (PR9): Capturing Market Opportunities
PR9 stands out with a ‘Buy’ rating and a target price of THB32. The hospital’s solid EPS growth forecast of 28.9% in FY24 and 15.4% in FY25 reflects its strategic positioning to capture market opportunities. With a focus on expanding its service offerings and enhancing patient care, PR9 is well-positioned to leverage increasing healthcare demand.
Regional and Peer Comparisons
On a regional scale, healthcare entities like Apollo Hospitals (APHS) and Max Healthcare (MAXHEALT) in India, and IHH Healthcare in Malaysia, provide useful benchmarks. BDMS’s regional peers exhibit diverse growth trajectories, with APHS showing a robust EPS CAGR of 34% and IHH maintaining strong earnings with a projected 7.1% dividend yield in FY25.
This in-depth analysis underscores the dynamic nature of the healthcare sector in Thailand, where strategic positioning and adaptive policy responses are crucial for sustained growth. Investors are advised to consider these insights carefully, as the healthcare landscape continues to evolve amidst regulatory changes and demographic shifts.
