Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

Bangkok Dusit Medical Services / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bangkok-dusit-medical-services-pcl" target="_blank" data-smartkarma-citation="entities:875:1" rel="noopener">Bangkok Dusit Medical Services (BDMS TB)</a> posted 6% rise in revenue from hospital operations in 3Q24 as both International and Thai patients revenue reported growth of 8% and 6%, respectively.</li>
<li>EBITDA grew at 8% YoY to THB7.1B, due to cost control while net profit also rose 9% YoY to THB4.2B on lower interest cost.</li>
<li>BDMS opened Phuket Cancer Center in October 2024 which will help expand cancer patient coverage in Southern part of Thailand.</li>
</ul>



Bangkok Dusit Medical Services (BDMS TB) posted 6% rise in revenue from hospital operations in 3Q24 as both International and Thai patients revenue reported growth of 8% and 6%, respectively.
EBITDA grew at 8% YoY to THB7.1B, due to cost control while net profit also rose 9% YoY to THB4.2B on lower interest cost.
BDMS opened Phuket Cancer Center in October 2024 which will help expand cancer patient coverage in Southern part of Thailand.


Bangkok Dusit Medical Services (BDMS TB): Both Thai and Foreign Patient Drive Growth, Margins Expand

Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

<ul><li>We downgrade our rating to Neutral (previously Outperform), with a more negative view on the fundamentals.</li><li>This is due to the expected 2024-26E EPS growth of just a +5% CAGR, weaker than the industry average of +7%.</li><li>On top of that, the stock price offers only 4% upside to the new fair value (FV).</li></ul>

We downgrade our rating to Neutral (previously Outperform), with a more negative view on the fundamentals.This is due to the expected 2024-26E EPS growth of just a +5% CAGR, weaker than the industry average of +7%.On top of that, the stock price offers only 4% upside to the new fair value (FV).

BDMS TB- Revised Down Earnings Forecasts to Reflect Weak Foreign Patient Numbers

<ul><li>We upgraded our rating to Outperform (previously Neutral), with a more positive outlook on the fundamentals.</li><li>The stock price has declined by 13% since our last report (2 months), widening the upside to +13% from the fair value of Bt28.75,based on a required return of 3.7%.</li><li>The two-year earnings performance is expected to grow well, with a 2024-26E CAGR of +8%, in line with the industry, which should see a CAGR of +9%.</li></ul>

We upgraded our rating to Outperform (previously Neutral), with a more positive outlook on the fundamentals.The stock price has declined by 13% since our last report (2 months), widening the upside to +13% from the fair value of Bt28.75,based on a required return of 3.7%.The two-year earnings performance is expected to grow well, with a 2024-26E CAGR of +8%, in line with the industry, which should see a CAGR of +9%.

Bangkok Dusit Medical Services Bdms - In-Line 3Q24 NP

<ul><li>We initiate coverage on BDMS with a Neutral rating and a 12- month fair value (12M FV) of Bt28.75, based on the earnings yield method with a required return of 3.7%.</li><li>The valuation metrics indicate long-term earnings growth at a CAGR of 8% in 2024-26E; meanwhile, the share price implies downside of -3%, and the tactical upside is very limited.</li><li>We like BDMS for its diversified revenue streams across various patient groups, its extensive network of hospitals, and its ability to cater to patients with health insurance, complex medical conditions, and the aging population through wellness services.</li></ul>

We initiate coverage on BDMS with a Neutral rating and a 12- month fair value (12M FV) of Bt28.75, based on the earnings yield method with a required return of 3.7%.The valuation metrics indicate long-term earnings growth at a CAGR of 8% in 2024-26E; meanwhile, the share price implies downside of -3%, and the tactical upside is very limited.We like BDMS for its diversified revenue streams across various patient groups, its extensive network of hospitals, and its ability to cater to patients with health insurance, complex medical conditions, and the aging population through wellness services.

Bangkok Dusit Medical Services - Expected Earnings Peak in 3Q24E Already Priced In

Thematic (Sector/Industry)

<ul><li>Although the market is likely to revise down EPS estimates following weaker-than- expected 3Q24 earnings, using the KTX implied EPS tool, we find that most sectors (accounting for over 80% of total market capitalization) have partially priced in the negative factors, which limits the downside risk.</li><li>In addition, the SET Index's correction of -0.8% (since the 3Q24 earnings announcements) has kept the market risk premium (MRP) stable at 4.213%, matching the lower bound of the trading buy range at an MRP of 4.21% (-1 S.D.).</li><li>This suggests that the SET is at a level where the risk-reward appears attractive. </li></ul>

Although the market is likely to revise down EPS estimates following weaker-than- expected 3Q24 earnings, using the KTX implied EPS tool, we find that most sectors (accounting for over 80% of total market capitalization) have partially priced in the negative factors, which limits the downside risk.In addition, the SET Index's correction of -0.8% (since the 3Q24 earnings announcements) has kept the market risk premium (MRP) stable at 4.213%, matching the lower bound of the trading buy range at an MRP of 4.21% (-1 S.D.).This suggests that the SET is at a level where the risk-reward appears attractive. 

Special Report: Investment Strategy Post-3Q24 Earnings Reports - NOVEMBER 21, 2024

Thailand

Bangkok Dusit Medical Services Public Company Limited operates Bangkok General Hospital. The Hospital specializes in cardiovascular, lung, neurological, eye and genitourinary cancer, as well as physical therapy and medical imaging.

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Bangkok Dusit Medical Services (BDMS TB)