Pi Securities recommends buying BH with a 220 baht target, expects 3-4% profit growth on foreign patients and Phuket branch

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โดย thunhoon.com·TH·Read original
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Pi Securities has issued an analysis recommending a buy on Bumrungrad Hospital, or BH, setting a 2027 fair value of 220 baht per share against the current price of 195.50 baht, an upside of 12.5%. The valuation uses a discounted cash flow method based on a WACC of 8.5% and terminal growth of 2.0%, equivalent to 21.7 times PE'27E, while the stock trades at 18.8 times, close to the hospital sector average of 18.4 times. Pi Securities expects BH's profit to grow 3.6% and 3.2% year on year in 2026 and 2027 respectively, driven mainly by a recovery in foreign patients, particularly from the Middle East and Myanmar. In 2027, additional support will come from the opening of Bumrungrad International Phuket, BH's second branch, with 212 beds and an investment of about 4.3 billion baht, fully funded by cash. The first phase will open for service within the third quarter of 2027, starting with 50 inpatient beds and targeting luxury customers. Management expects the branch to turn profitable within one to one and a half years of opening. Meanwhile, the main branch has an extension project in Soi Sukhumvit 1 that will be a new six-storey cancer treatment centre, expanding cancer examination rooms from 10 to 23, chemotherapy rooms from 18 to 30, and adding 59 inpatient beds in the cancer centre, with completion expected by the end of 2027. On results, BH reported second-quarter 2026 net profit of 1.889 billion baht, up 2% year on year and 6% above market expectations. Hospital operating revenue was 6.231 billion baht, up 4% year on year, with revenue from foreign patients, which accounts for 66% of revenue, up 7% year on year as Myanmar patients rose 28% year on year, Middle East patients rose 7% year on year, and American patients rose 19% year on year. Revenue from Thai patients, which accounts for 34%, fell 2% year on year. Pi Securities expects BH revenue of 26.0 billion baht in 2026 and 27.0 billion baht in 2027, up 3% and 4% respectively, with gross margins of 51.9% and 51.4%, the 2027 figure down 50 basis points because of the early-stage losses at the Phuket branch. Net profit is forecast at 7.803 billion baht in 2026 and 8.052 billion baht in 2027, up 3.9% and 3.2% respectively. Pi Securities views BH's ability to raise treatment prices by about 5% a year, above Thailand's average inflation of 1.1% a year over the past 10 years, as a factor supporting long-term value. Key risks include more intense competition in the premium healthcare market, reliance on foreign patients, and medical personnel risk.

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Bumrungrad Hospital PCL
BH
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Pi Securities recommends buying BH with a 220 baht target, citing 3-4% profit growth and upside from foreign patients and the new Phuket branch.

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