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Bumrungrad Hospital Pcl (SET:BH) is Thailand's second largest healthcare provider by market capitalization, 146.51 billion baht as of April 11, after Bangkok Dusit Medical Services Pcl (SET:BDMS), 374.88 billion baht. According to the Financial Times, the company provides outpatient and inpatient healthcare services, including medical services, heart center, dental center, allergy center, and other related services. It also provides emergency care, full equipped operation theaters and an international patient service center.
Foreign patients account for 66% of the company's revenue and Myanmar is the largest revenue contributor among non-Thai nationalities, according to company data as of August 2015. As stated by Reuters, a joint venture, Bumrungrad Myanmar Co Ltd with Yangon International Medical Services Co Ltd, was established last year which provides primary care and diagnostic services for patients residing in Myanmar.
Bumrungrad Hospital said on February 25 that its fourth-quarter 2015 revenues were 4.56 billion baht, exceeding the 4.50 billion baht consensus estimate by 5 analysts, as reported by the Financial Times. Revenues for the full year 2015 were 17.66 billion baht, up 12.99% on a year-on-year basis. The full year revenue estimate by 18 analysts was 17.78 billion baht.
The company posted fourth-quarter 2015 earnings of 0.89 baht per share, missing the 1.05 baht per share estimate of one analyst. For the full year 2015, earnings were 3.96 baht per share, a 25.71% increase on a year-on-year basis. The full year earnings missed the 4.65 baht per share estimate by 19 analysts.
BH reported a dividend of 2.35 baht a share in 2015, which was a 20.51% increase from 2014. The 19 analysts covering the company expect dividends of 2.75 baht a share for the upcoming fiscal year, representing an increase of 16.85%.
The medical tourism sector, where Thailand, Singapore and Malaysia are currently considered to be major players, has become increasingly competitive. According to Asia One, treatment costs in Thailand are about half the rate in Singapore, but is more expensive than in Malaysia, the Philippines and India. Although growth in the sector remains solid, investors may want to pay close attention to the profit margins and pricing pressures of the health and medical providers.
Technically, shares of BH were overbought in early September and have fallen 22.69% from its 52-week high of 260 baht per share. The stock is now trading under the 200-day SMA in a bearish descending triangle chart pattern. The downside risks significantly increase if the 195 baht per share support level breaks down.
According to the Financial Times, the consensus amongst 22 polled investment analysts covering BH gave the company a Hold rating, with the median 12-month price target of 215 baht per share, as of April 9.
Disclosure: No position and no recommendation. |
