THAILAND SET

UPDATE: Long-Term Uptrend Of BDMS Shares Breaking Down Ahead Of Earnings Announcement

Witawat (Ed) Wijaranakula, Ph.D.
Fri Feb 22, 2017

Bangkok Dusit Medical Services PCL (SET:BDMS) is one of the largest private hospital operators in Thailand, with approximately 105.1 billion baht in assets as of September 2016. BDMS currently has 41 hospitals in Thailand and 2 hospitals in Cambodia with a total of 7,519 beds, providing healthcare for domestic and overseas patients. 

As of January 29, 2016, BDMS majority shareholders are Dr. Prasert Prasarttong-Osoth, M.D., the founder, President and CEO of BDMS, and his family, which own 22.38% stake of the company, Mr. Wichai Thongtang, former Executive Chairman of medical service company Prasit Patana PCL (acquired by BDMS in 2011) and his family, which own 10.74% stake of the company, and Bangkok Airways PCL (SET:BA) and Bangkok Airways Holding Co., Ltd., which own 7.83% stake of the company.

Dr. Prasarttong-Osoth is the CEO of Bangkok Airways PCL and the Chairman of ANB Laboratories Co. Ltd. He is also the founder of Bangkok Media and Broadcasting Co, operator of variety high-definition channel PTTV, which provides in-flight content for Bangkok Airways and on-ground content for BDMS hospitals.

On August 15, Bangkok Dusit Medical Services reported its third-quarter 2016 revenues of 18.2 billion baht, up 12.35% year-on-year from 16.2 billion baht. Revenues from hospital operations were 17.3 billion baht, up 12.75% from a year ago. Hospital operations revenues from Thai patients, about 74% of the total hospital operations revenues, grew 14% year-on-year, while those from international patients were up 10%. BDMS reported third-quarter 2016 net profits of 2.33 billion baht, up 11.5% year-on-year from 2.09 billion baht. The next earnings announcement from Bangkok Dusit Medical Services is expected during the week of February 28, 2017.

For 2015, BDMS reported a dividend of 0.26 baht per share, which represented a 13.04% decrease from 2014. The 21 analysts covering the company expect dividends of 0.28 baht per share for the upcoming fiscal year, representing a year-over-year increase of 7.69%, according to the Financial Times.

From our technical viewpoint, the BDMS long-term uptrend is breaking down after the stock pulled back sharply from the 22.00 baht level. Shares of BDMS are now bumping into the long-term trendline support and also the 20.50 baht key support level. The stock could pull back to the 19.00 baht level if the support canít hold. In early September, investors turned bearish on the stock after Narumol Noi-am, company CFO, told Reuters that the company cut its 2016 revenue growth target to 8-10%, from 11-12%, after reporting lower-than-expected growth in the first-half. 

In November, Bumrungrad Hospital PCL (SET:BH), 24% stake owned by Bangkok Dusit Medical Services, also revised its full year 2016 revenue from 8% to 10% growth to flat growth with a potential variance of 2%, as the international sector from both the Mongolian and Middle East markets remains weak.

According to the Financial Times, the consensus amongst 25 polled investment analysts covering Bangkok Dusit Medical Services gave the company an Outperform rating, with the median 12-month price target of 26.00 baht per share, as of February 18, 2017.

Disclosure: We hold long positions in BDMS and BH and no recommendation.

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