Daily Brief Health Care: Ramsay Health Care, Bumrungrad Hospital Pub Co, Jafron Biomedical Co Ltd and more

In today’s briefing:

Ramsay and KKR’s Game of Cat and Mouse
Bumrungrad Hospital Pub Co (BH TB): Flying High on Return of Medical Tourism
Jafron Biomedical (300529CH) 22H1- Possibility of Logic Reversal and Upside Potential of Stock Price

Ramsay and KKR’s Game of Cat and Mouse

Ramsay Health Care (RHC AU) disclosed that the KKR & Co Inc (KKR US) consortium withdrew its indicative proposal but remains committed to the alternative proposal, which the Board earlier rejected.
The alternative proposal, while inferior to the indicative proposal, is still attractive and better than the status quo of no deal. The Board will engage for an improved offer.
The value gap between the parties is not huge, and a deal is possible. The upside (20% to alternative proposal) vs downside (-9% to undisturbed price) is worth a punt.

Bumrungrad Hospital Pub Co (BH TB) reported strong Q2 2022 results, with revenue growth of 64% y/y, mainy driven by a 121% y/y increase in revenue from non-Thai patients.
Despite international patient volume is recovering, it is still lower than pre-COVID levels. Non-Thai patients contributed 66.2% of total revenue in Q2 2019, higher than 62.3% reported for Q2 2022.
Thailand targets 10 million foreign tourist arrivals this year, which should augur well for Bumrungrad.

The centralized procurement of hemoperfusion cartridge is the major risk. This is why capital market is divided over the logic of long-term growth when performance continued to grow in 2022H1.
Jafron is not without chances to get out of a passive situation. Either business diversification or internationalization would help re-establish the investment logic and improve the outlook.
The valuation of Jafron Biomedical Co Ltd (300529 CH)has entered the “hitting zone”. After continuous correction, there could be some rebound, like 10%-20% upside potential. Short term trade is recommended.

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