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Bumrungrad Hospital Public Company Ltd. (SET:BH), 24% stake owned by Bangkok Dusit Medical Services Public Company Ltd. (SET:BDMS) and 14.65% stake owned by Bangkok Insurance Public Company Ltd. (SET:BKI), as of August 18, 2016, is Thailand's second largest healthcare provider by market capitalization, 141.4 billion baht as of December 6, after BDMS, 354.7 billion baht.
The company currently has 580 licensed beds and capacity for over 5,500 outpatients per day and 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.
Bumrungrad Hospital said on November 3 that its third-quarter 2016 revenues were up 6.49% year-on-year to 4.60 billion baht, beating the 4.43 billion baht consensus estimate of two analysts polled by the Financial Times. The company posted third-quarter 2016 fully diluted earnings of 1.11 baht per share, up 14.43% year-on-year, but missing the 1.15 baht per share estimate of one analyst.
Bumrungrad Hospital reported a dividend of 2.35 baht a share in 2015, which was a 20.51% increase from 2014. The 23 analysts covering the company expect dividends of 2.49 baht a share for the upcoming fiscal year, representing an increase of 6.04%.
The company said in a released statement that the outpatient service revenue, about 47.1% of the total revenues, grew 8.6% in the third-quarter 2016, while the inpatient service revenue increased 1.8%. Outpatient volumes grew 1.2% during the quarter, compared to the same period last year, mostly due to the 2.7% growth from international markets and 0.3% from the Thai market. Inpatient volumes based on the number of admissions increased 1.1%, but declined 6.4% in terms of the patient length of stay in hospitals.
Looking forward, Bumrungrad Hospital continues to see volume pressures in the international sector from both the Mongolian and Middle East markets. In its earnings guidance, the company revised the full year 2016 revenue from 8% to 10% growth to flat growth with a potential variance of 2%.
Technically, shares of Bumrungrad Hospital broke out the bullish descending wedge chart pattern in October and are now bumping into a technical head resistance at 195 baht per share. The next key resistance level is 232 baht, if BH shares break out. According to the Financial Times, the consensus amongst 26 polled investment analysts covering BH gave the company a Hold rating, with the median 12-month price target of 184 baht per share, as of August 12.
Disclosure: We hold long positions in BH and BDMS and no recommendation.
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