Krungsri recommends Buy on BCH with a 12.00 baht target, eyeing 6-7% revenue growth in 3Q26F

AnalystM&A · Partnership
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Krungsri Securities stated that BCH's healthcare revenue continues to recover, with revenue in July 2026 growing 7% year-on-year and accelerating to roughly 8-9% year-on-year in August 2026, driven by both a recovery in patient volumes and a low base in August 2025 when the decline in Cambodia revenue began to take effect. September 2026 is also expected to grow well on both Thai and foreign patients. The research team expects 3Q26F revenue to grow about 6-7% year-on-year, compared with -1% year-on-year in 1H26, reflecting a clearly returning revenue momentum that will boost operating leverage and support the recovery in profit in 2H26F after being pressured in 1H26 by Cambodian patients and slowing self-pay Thai patients. Beyond the recovering revenue momentum, BCH also has upside from an increase in social security treatment fees and growth through M&A. From September 1, 2026, it will begin consolidating the operations of Ratchavej Ubon Ratchathani Hospital, which has average revenue of about 400,000 to 500,000 baht per month. Although the initial revenue contribution is small, it helps expand the revenue base and extend long-term growth. As for the increase in social security treatment fees, this is seen as significantly positive for BCH, since BCH derives as much as 38% of its total healthcare revenue from SSO revenue. The research team estimates that if the capitation rate rises 10% from 1,808 baht, it would lift SSO revenue by about 4% and net profit by about 11%, as well as adding about 0.60-0.70 baht of value to the target price. It views the social security fee increase as having a greater near-term positive impact on profit than M&A growth. The research team has a positive view on BCH based on three main factors: the clearly recovering 3Q26F revenue trend from increased service use by both Thai and foreign patients; the SSO revenue share of as much as 38% of total healthcare revenue, which makes the treatment fee increase fairly impactful on profit; and the consolidation of Ratchavej Ubon Ratchathani Hospital from late 3Q26F, which will help expand the revenue base and increase opportunities to extend the network over the medium to long term. It recommends Buy on BCH with a target price of 12.00, valued using DCF at a WACC of 7.7%, viewing the 3Q26F revenue recovery as a short-term catalyst, while the social security treatment fee increase and M&A are medium-term upside. BCH stands to benefit the most in the sector if social security treatment fees are raised, which would support profit growth and open the door to a re-rating of the stock.

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