Bumrungrad Hospital Shares Struggle As Revenues Shrink

Witawat (Ed) Wijaranakula, Ph.D.
Mon Mar 20, 2017

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 at 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 February 28 that its fourth-quarter 2016 revenues were down 5% year-on-year to 4.33 billion baht, missing the 4.64 billion baht consensus estimate of two analysts polled by Thompson Reuters. The company blamed the sinking revenues on the decline in non-Thai patients, as the revenue contribution from Thai patients in the fourth-quarter 2016 was 37.3% and from non-Thai patients was 62.7%, compared with 35.4% and 64.6%, respectively, during the same period last year. 

The company posted fourth-quarter 2016 fully diluted earnings of 0.95 baht per share, up 6.74% year-on-year, but missing the 0.98 baht per share consensus estimate of two analysts. For the full-year 2016, the company reported EPS of 4.18 baht on revenues of 17.91 billion baht, missing the consensus estimate EPS of 4.76 baht and consensus estimate revenues of 18.31 billion baht from 22 polled analysts.

Bumrungrad Hospital reported a dividend of 2.52 baht a share in 2016, which was a 6.38% increase from 2015. The 19 analysts covering the company expect dividends of 2.75 baht a share for the upcoming fiscal year, representing an increase of 9.80%. 

Technically, shares of Bumrungrad Hospital have been bumping along the lower trendline support of a symmetrical triangle chart pattern after a pullback from a technical head resistance at 195 baht per share in December. The stock just broke out the 200-day SMA (light-blue), but there are several more head resistances ahead. 

According to Thomson Reuters, the consensus amongst 25 polled investment analysts covering BH gave the company a Hold rating, with the median 12-month price target of 182 baht per share, as of March 12. 

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


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