Bangkok Chain Hospital Public Company Limited

The Cabinet meeting approved in principle a draft royal decree to extend Social Security coverage under Section 33 to three groups of employees previously exempted: those in agriculture, forestry, and animal husbandry; employees of individual employers; and employees of stall-holder employers. This is expected to add 550,000 insured persons in 2026 and 1.05 million by 2030. Krungsri Securities views this as a positive sentiment for hospital groups treating insured patients, with upside to revenue in the medium to long term. Hospitals with the highest social security revenue in the first half include BCH at 38% and CHG at 30%, while RJH has 53%, SKR 36%, VIH 26%, and PHG 40%. The firm maintains a bullish stance on the hospital group, expecting profits to have passed the trough, supported by the high season and the increase in social security treatment rates. Top picks are BDMS with a target price of 25 baht and PR9 with a target price of 24 baht. BCH, with a target price of 12 baht, is the biggest beneficiary if treatment rates are adjusted.

Bangkok Chain Hospital Public Company Limited, or BCH, said third-quarter 2026 operating results are likely to continue recovering from the second quarter because this is the high season for the business. The company began seeing good signals from late May through June, and expects fourth-quarter 2026 growth to continue on the back of recovering foreign customers, especially the Middle East segment, which has grown 100% since the first quarter of 2026, particularly Qatar. The hospital still targets single-digit revenue growth this year. The company is in talks on more than 10 mergers and acquisitions, and will select only hospitals in suitable locations that can genuinely generate growth, after its latest investment in Ratchavej Ubon Ratchathani Hospital worth about 490 million baht, which is expected to be completed by the end of this month. It also plans to modernise systems to generate profit quickly. In addition, BCH is preparing to meet the Social Security Board for the second time on 7 September 2026 to adjust capitation rates for all items, with completion expected within 90 days or before 24 October 2026. The company is confident that next month's Social Security Board election will not affect the discussions because this is routine work that must be forwarded to the tripartite board, and the Social Security Fund remains strong after the maximum contribution was raised to 875 baht per month from 750 baht.

Bualuang Securities assesses that hospital stocks have already passed their low point of the year in the second quarter and will recover in the third quarter, driven by seasonal factors and pent-up demand from the Middle East. Combined core profit of the four hospital stocks under coverage was 5.7 billion baht, down 4% year-on-year and 10% quarter-on-quarter, on combined revenue of 37 billion baht, up 1% year-on-year but down 3% quarter-on-quarter. The quarterly decline came from softer Thai patient volumes due to seasonality and economic conditions, while the fly-in business continued to grow. Average gross margin was 36.5%, down 110 basis points year-on-year and 90 basis points quarter-on-quarter, due to higher depreciation from capacity expansion. BH and PR9 still posted profit growth from fly-in demand, while BDMS was most affected by fewer Cambodian patients. BCH beat estimates as social security revenue helped offset weaker general patient volumes. For the third quarter, the picture improves as flights between the Middle East and Bangkok return to pre-conflict levels, combined with the high season for both Thai and fly-in patients. July data already show revenue increasing both year-on-year and month-on-month. On financial positions, BH stands out most, with second-quarter ROE rising to 27.6% from 21.9% in the first quarter and 25.9% in the second quarter last year, along with the highest net cash position in the group. BDMS is the only company with net debt, but its debt-to-equity ratio is only 0.1 times. Bualuang maintains an overweight stance on the hospital sector relative to the market, with BH as the top pick on the recovery of Middle Eastern patients and a strong financial position across the board. For BDMS, Bualuang keeps a buy rating with a target price of 23 baht for end-2027, viewing the second quarter as likely the low point. July revenue trends have started to return to year-on-year growth for both Thai and foreign customers, leading to expectations that third-quarter core profit will increase both year-on-year and quarter-on-quarter. Third-quarter support comes from the disease outbreak season, no high base from Cambodian customers as in the previous year, and Myanmar revenue still growing strongly at 42% year-on-year in the second quarter, continuing from 43% year-on-year in the fourth quarter last year and the first quarter this year. Third-quarter gross margin is expected to rise to 35-37% from a higher proportion of more complex cases. Net debt-to-equity is only 0.1 times, and second-quarter receivable turnover rose to 43 times, up 7% year-on-year. Inventory turnover was 16 times, above the group average of 12 times. The stock trades at a price-to-earnings ratio of about 18 times, below the long-term average by 1.5 standard deviations. First-half profit accounted for 45% of the full-year estimate, close to the normal proportion, so full-year profit is still seen as in line with estimates. For BH, Bualuang keeps a buy rating with a target price of 220 baht and still selects it as the standout hospital stock. The third quarter has two main supports at the same time: the recovery of Middle Eastern patients travelling for treatment and the high season for Thai patients. Higher treatment intensity per case supports both revenue and gross margin, even though foreign patient numbers have not fully recovered. Third-quarter core profit is expected to grow faster year-on-year than in the second quarter and to increase quarter-on-quarter on seasonality. Preliminary July data indicate that Thai patients have started to increase from rainy-season illnesses, while flight routes from the Middle East have returned to pre-conflict levels, although patient numbers still lag. The impact of Cambodian patients suspending services after the border incident on 24 July 2025 will not affect third-quarter figures. On financial position, second-quarter ROE was 27.6%, up from 21.9% in the first quarter and 25.9% in the second quarter last year, clearly higher than other stocks in the group. The company has a net cash position and receivable turnover rose to 84 times from 59 times in the second quarter last year. The stock trades at a 2027 price-to-earnings ratio of about 18 times, while the target price of 220 baht is based on a price-to-earnings ratio of 21 times, or one standard deviation below the 10-year average of 30 times. Dividends are an additional upside, with the first-half interim dividend of 4 baht per share higher than expected. If a special dividend is paid at the same proportion as in 2025, dividend yield would rise to 6.0%, compared with a base case of 2.6%. However, the main point of the investment idea still places more weight on a return to profit growth than on dividends as a supplement.

Analysts at InnovestX Securities expect combined net profit of Thai listed companies in the third quarter of 2026 to continue growing from the same period last year, despite pressure from geopolitical risks and a prolonged El Niño. Combined net profit in the second quarter of 2026 expanded 14.3 percent from a year earlier and 12.0 percent from the previous quarter, marking a sixth consecutive quarter of growth and a fifth consecutive quarter of double-digit growth, supported by higher margins and selling price increases amid expanding demand, especially in energy, petrochemicals, and construction materials, which benefited from the Middle East conflict. More than 50 percent of the 107 listed companies with market forecasts reported net profit above expectations. The broker recommends avoiding sectors where earnings remain weak and accumulating five The Star stocks: HANA, ERW, PR9, BCH, and TIDLOR, which have potential for standout profit growth both from a year earlier and from the previous quarter, driven by company-specific positive factors and government stimulus measures.

UOB Kay Hian Securities Thailand maintains a buy recommendation on BCH shares with a target price of 14 baht, based on an EV/EBITDA multiple of 10 times for 2026. Second-quarter 2026 net profit came in at 343 million baht, down 11.6 percent from a year earlier but up 28.2 percent from the previous quarter, in line with estimates. The research team sees a positive trend for the third quarter of 2026, driven by a rise in Thai patient numbers amid disease outbreaks and the possibility that Social Security Office medical fees will increase by around 10 percent by late in the third quarter or early in the fourth quarter of 2026. Revenue from Middle Eastern patients also remains strong, growing about 40 percent year on year in the second quarter, even as revenue from Cambodian patients fell 70 to 80 percent from a year earlier. The company announced an interim dividend of 0.15 baht per share and a special dividend of 0.20 baht per share, representing a yield of about 3 percent.

Finansia Syrus Securities said Bangkok Chain Hospital, or BCH, posted second-quarter 2026 normalised profit of 343 million baht, up 28% from the previous quarter but down 10% from the same period last year. Profit came in 4% above the analyst's estimate and 3% above market expectations. Total revenue was 2.98 billion baht, up 3% from the previous quarter but down 1.1% from the same period last year. Revenue from Middle Eastern patients recovered strongly, rising 22% from the previous quarter and 44% from the same period last year. Finansia Syrus expects BCH's profit to continue recovering in the second half of 2026, supported by a recovery in Thai and Middle Eastern patients, as well as a possible increase in the social security capitation rate in the fourth quarter of 2026. Every 10% increase would lift the 2027 normalised profit estimate by about 3%. BCH recently approved an investment of no more than 490 million baht to acquire Ratchavej Ubon Ratchathani Hospital, equal to 2.8% of total assets, and announced an interim dividend of 0.35 baht per share, a yield of 3.2%, including a special dividend of 0.20 baht per share, with the ex-dividend date set for 27 August 2026.

Bualuang Securities released its review of the financial statements of 11 companies, finding that 8 reported better-than-expected profits: GUNKUL, CK, SPRC, CPF, CBG, AWC, HANA, and BCH. STECON and BH posted profits in line with expectations, while BTS reported a smaller loss than expected. GUNKUL posted core profit of 567 million baht, 7% above expectations. CK posted core profit of 800 million baht, 17% above expectations, and announced an interim dividend of 0.20 baht per share. SPRC posted core profit of 7.09 billion baht, 11% above expectations, and announced a first-half dividend of 0.50 baht per share. CPF posted core profit of 4.57 billion baht, 13% above market expectations. CBG posted core profit of 736 million baht, 13% above expectations. AWC posted core profit of 232 million baht, above expectations. HANA posted core profit of 278 million baht, 25% above expectations. BCH posted core profit of 343 million baht, 13% above expectations, and announced an interim dividend of 0.15 baht per share. STECON posted core profit of 910 million baht, in line with expectations. BH posted core profit of 1.89 billion baht, in line with expectations, and announced an interim dividend of 4 baht per share. BTS reported a core loss of 601 million baht, smaller than the slight profit originally expected.

Asia Plus Securities' research team said profits of 283 Thai listed companies out of 682 that have reported second-quarter results came in 11.9% above market expectations. Combined with estimates for the remaining companies, which cover 93% of market capitalisation, it assesses that total second-quarter profit could reach 355 billion baht, up 6.7% from the previous quarter and 8.2% from a year earlier. This raises expectations that second-quarter profit for fiscal 2026 may set a record high, continuing from the first quarter of fiscal 2026. The main growth drivers are petrochemicals, packaging and energy. Including commodity-linked groups such as energy, petrochemicals, food and agriculture, they would account for 44% of total market profit, compared with a normal level of about 30%. The research team views that first-half profit already represents 60% of the full-year target, reducing pressure in the third and fourth quarters and opening upside to the market-wide earnings per share estimate of 95 baht per share, which gives room for the index target to be revised upward. Meanwhile, foreign fund flows into the Thai stock market slowed clearly in August, with cumulative net selling of nearly 10 billion baht, while retail investors were net buyers supporting the index. The research team recommends three stock groups: companies with better-than-expected results such as IRPC, TCAP, KCE and CENTEL; companies benefiting from commodities and geopolitics such as TASCO, RCL, BCP and PTTGC; and companies expected to recover in the second half such as THAI, ERW and BCH. Its top three picks are PTT, BDMS and CENTEL.

Bangkok Chain Hospital Public Company Limited, or BCH, has approved its subsidiary Kasemrad Hospital Ubon Ratchathani Company Limited to acquire the assets of Rajavej Ubon Ratchathani Hospital in Ubon Ratchathani province for no more than 490 million baht. The deal is expected to be completed by August 2026. This investment aligns with the strategy of expanding the hospital network into the lower northeastern region to broaden the patient base and support long-term growth.

KGI Securities Thailand expects BCH's second-quarter 2026 profit to recover from the previous quarter, with a normalized profit estimate of 334 million baht, down 12.5% year-on-year but up 24.8% quarter-on-quarter, accounting for 25% of the full-year profit forecast of 1.33 billion baht. Key drivers include recognition of chronic disease revenue under social security rights of around 70 million baht and a rise in foreign patient numbers. The research team has raised the 2027 target price to 12.50 baht from 11.00 baht, lowering the weighted average cost of capital to 8.5% to reflect the recovery potential of foreign patients, and maintains a Buy recommendation.

Pi Securities projects BCH's second-quarter 2026 profit at 329 million baht, down 19.9% year-on-year but up 15.5% quarter-on-quarter, supported by recognition of special revenue from the risk burden of 26 chronic diseases worth about 70 million baht, an early rainy season, and a recovery in foreign patients, especially from the Middle East. The gross profit margin is expected at 27.6%, down from 30.1% a year earlier but improving from 26.2% in the first quarter. In addition, BCH is conducting due diligence to invest in Ratchavej Ubon Ratchathani Company Limited, which is expected to be completed within the third quarter of 2026, and has a chance to increase the capitation payment rate for social security in the second half, along with plans to expand beds by 50%. The fair value is set at 11.40 baht.

KS Securities expects the Stock Exchange of Thailand index to move in a range of 1,600 to 1,650 points this week, as the market begins to ease from selling pressure on semiconductor stocks in South Korea. Leveraged ETF positions are currently at low levels, reflecting that forced selling has largely run its course, which should help reduce global equity market volatility and boost speculative appetite for risk assets. Key factors to watch include second-quarter 2026 earnings reports of listed companies, which are expected to remain broadly in line with the first quarter, as well as Thailand's July consumer price index, forecast at plus 2.71 percent year-on-year, and core CPI at plus 1.46 percent. Investors are also advised to monitor PMI, ISM, and US non-farm payrolls data. For top weekly picks, KS selects KCE and BCH. KCE's base price is set at 45 baht, with second-quarter 2026 net profit forecast at 237 million baht, growing 30 percent year-on-year and flat quarter-on-quarter, supported by a strong gross margin and lower costs, although foreign exchange gains are expected to soften. Revenue is projected to rise 5 percent both year-on-year and quarter-on-quarter, driven by higher average selling prices and utilization rates amid recovering PCB demand, lifting the gross margin to 18.3 percent. For the second half, KS maintains a buy rating, expecting profit growth both year-on-year and quarter-on-quarter from seasonal demand and global PCB price increases. BCH's base price is set at 11.30 baht, with a buy rating and a mid-2027 target price of 11.3 baht. KS believes earnings have bottomed and will be supported by a recovery in the second half of 2026, along with the potential for a special dividend. BCH is also studying the acquisition of Ratchavej Ubon Ratchathani Hospital, with a conclusion expected in the third quarter of 2026. Although the hospital is currently loss-making and has negative equity, it offers value-creation potential through network efficiency improvements, refinancing, and brand enhancement. An additional positive factor could arise if the Social Security Office adjusts the capitation rate. If the flat-rate payment increases by 10 percent from 2027, BCH's fair value could rise to 12.1 baht, or 7 percent above the current target price.

Kasikorn Securities has maintained its Buy recommendation on Bangkok Chain Hospital Public Company Limited, or BCH, and raised its mid-2027 target price to THB 11.3 from THB 11.0, after rolling forward its valuation base year while keeping earnings estimates unchanged. The recent share price weakness has already reflected second-quarter 2026 results, while a strategic acquisition, earnings recovery, and other supportive factors underpin upside potential. BCH is studying the acquisition of Rajavej Ubon Ratchathani Hospital, which would mark its first expansion into the northeastern region. The feasibility study is expected to be completed in the third quarter of 2026. The target hospital has good revenue and margins but has been persistently loss-making with negative shareholders' equity. The deal is likely to create value through network efficiency enhancements, refinancing, brand upgrading, and potential valuation multiple expansion. The research team forecasts second-quarter 2026 normalised profit of THB 331 million, up 24 percent quarter-on-quarter but down 13 percent year-on-year. Dividend per share is expected to be steady at THB 0.15, excluding any special dividend. The THB 11.3 target price is based on discounted cash flow methodology with a weighted average cost of capital of 8.2 percent, implying a core price-to-earnings ratio of 22.4 times in 2026 and 22.1 times in 2027. If a 10 percent increase in the Social Security Office's capitation rate to THB 1,989 from 2027 is factored in, the equity value would rise to THB 12.1, or a 7 percent upside. The research team views stronger earnings recovery in the second half of 2026, the Social Security Office rate hike, and the potential for a special dividend as key share price catalysts, while key downside risks include a weaker-than-expected economy and cost pressures.

US stocks closed sharply lower overnight, with the Dow falling 507 points or 0.97% and the Nasdaq dropping 2%, after Brent crude oil prices surged 7% following attacks by Yemen's Houthi group on two Saudi oil tankers in the Red Sea, stoking inflation fears. Tech stocks fell heavily, with Google down 7% and Meta down 3.4%, while defensive plays like Eli Lilly gained 1.97% and Johnson & Johnson added 1.4%. Meanwhile, the US announced tariff hikes on imports from 60 countries including Thailand at rates of 10% to 12.5% under Section 301, citing failure to curb forced labor, a factor pressuring Thai export stocks such as ITC and Thai Union, though a weaker baht provided some support. Pi Securities estimates the SET index range today at 1,620 to 1,650 points and recommends defensive stocks like Advanced Info Service, Bangkok Chain Hospital, Bangkok Dusit Medical Services, CP All, and Central Pattana, as well as energy and petrochemical plays such as PTT, PTT Exploration and Production, PTT Global Chemical, and Thai Oil.

Asia Plus Securities estimates BCH's net profit for the second quarter of 2026 at 334 million baht, down 13.9 percent from a year earlier but up 25.0 percent from the previous quarter. The result was supported by special revenue from the risk burden of 26 chronic diseases worth about 70 million baht, and the return of Middle Eastern foreign patients after the end of Ramadan and easing of the Iran war situation. Meanwhile, Myanmar patients and American expatriates continued to grow well, helping offset slowing cash-paying Thai patient revenue from the KPS beauty center and border checkpoint closures affecting KH Aranyaprathet Hospital. The research team maintains its full-year 2026 net profit forecast at 1.293 billion baht, down 2.7 percent from a year earlier, and keeps its fair value at 11.00 baht with a speculative buy recommendation. It sees a second-half recovery trend driven by foreign patients and the entry into the high season for the hospital business.

US stocks closed lower overnight, with the Dow Jones falling 307.16 points to 51,839.26, the S&P 500 dropping 14.41 points to 7,443.28, and the Nasdaq declining 12.17 points to 25,508.07, amid concerns that Iran-backed Houthi rebels in Yemen have declared a naval blockade against Saudi Arabia, opening a new front in the US-Israel-Iran conflict and heightening risks to energy supply and global trade. In European markets, the Stoxx 600 index closed down 1.93 points at 639.60, with energy stocks gaining 0.98% after Brent crude oil prices surged past 90 dollars per barrel, while travel and leisure stocks fell 0.95%, led by Ryanair which plunged 4.55% after reporting a 34% drop in first-quarter 2026 profit due to higher fuel costs. Asian markets mostly rose this morning, led by Japan's Nikkei up 0.63% and China's Shanghai Composite up 0.42%, supported by a recovery in chip stocks. The Thai stock market is expected to continue its positive trend, buoyed by better-than-expected earnings from the banking sector, and BCH shares are in focus after the company prepares to close a deal to acquire 100% of Ratchavej Ubon Ratchathani Hospital to expand its foreign customer base from Laos and Cambodia.

Bangkok Chain Hospital, or BCH, has signed a preliminary memorandum of understanding with Rajavej Ubon Ratchathani Company Limited, the operator of Rajavej Ubon Ratchathani Hospital, to study the feasibility of investing in and expanding its private hospital network in Ubon Ratchathani province. The study aims to support BCH's network expansion into the healthcare hub of the lower northeastern region, which has the potential to serve patients from nearby provinces and southern areas of Laos. Currently, BCH operates 15 hospitals in Thailand and one in Laos under the names Kasemrad International Hospital, Kasemrad Hospital, World Medical Hospital, and Karunvej Hospital. The transaction is still undergoing due diligence and negotiation of key terms, with the memorandum of understanding being non-binding, and the deal subject to due diligence results and approval by BCH's board of directors. The feasibility study is expected to be completed by the third quarter of 2026.

Yuanta Securities expects second-quarter 2026 earnings for the hospital group to soften both quarter-on-quarter and year-on-year, as Thai patient revenue remains flat amid the economic climate, while foreign patient flows from certain markets continue to be affected by the Middle East situation and the Cambodian border issue. However, three companies are set to post year-on-year profit growth: PR9, BH, and CHG. PR9 is supported by a recovery in foreign patients, particularly from Myanmar, along with complex-disease cases that boost revenue per head, while drug and medical supply costs ease. BH is expected to deliver low single-digit profit growth as foreign patient numbers begin to recover, and CHG benefits from a low base and social security revenue. For the second half of 2026, group profits are forecast to rebound both half-on-half and compared with the second half of last year, driven by the high season as Middle Eastern and CLMV patients gradually return. Meanwhile, the Cambodian border issue will have lapped its one-year anniversary in June, lowering the base for comparison and opening room for recovery. In addition, previously deferred treatment demand and a rise in complex-disease cases will support revenue per head and profitability margins. On the policy front, the government is studying a shift in the civil servant medical benefit scheme from a direct reimbursement system to a health insurance model. If implemented, this would be a medium- to long-term positive sentiment driver for private hospitals, especially BDMS, BCH, and CHG, which have broad networks and experience serving insured patients. The social security issue remains a key factor for BCH, CHG, RJH, and LPH. The risk of complex-disease revenue reversals in 2026 has diminished, while there is still upside risk from a potential increase in the capitation rate from the current 1,808 baht per person per year. We maintain a market-weight rating on the hospital group. Although second-half 2026 profits are expected to recover, renewed flare-ups in Middle East tensions could disrupt travel and cause the recovery to fall short of expectations. Our top picks are PR9 with a target price of 22.80 baht, supported by recovering foreign patient revenue and complex-disease cases as well as easing costs, which should drive above-group profit growth; and CHG with a target price of 1.95 baht, given its stronger year-on-year profit growth relative to peers, low exposure to Middle Eastern clients, and upside from social security and the civil servant benefit reform. BDMS has a target price of 24.70 baht, but its share price has underperformed the group and we expect a second-half 2026 profit recovery. For BCH, we recommend a trading strategy based on the potential for a special dividend and upside risk from social security.