BH: Hospital Serves Swelling Global Demand

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Bottom-Up

Bumrungrad Hospital Pub Co / Equity Bottom-Up

The decline in oil prices from 2014's levels has pressured government spending in Gulf Cooperation Council (GCC)* countries. This long-term change in the region's economic model has started to impact healthcare policy, resulting in less generous benefits. The region is a significant source of "medical tourism" for several countries such as the the UK, Germany, US, and Thailand. Bumrungrad Hospital PCL (BH: TB), -21% YTD, has significant exposure to this change. In particular, expectations that Bumrungrad's EPS growth will accelerate to 10% in 2017 from 0% in 2016 look optimistic given the nature and timing of these changes. Bangkok Dusit Medical Services PCL (BDMS: TB) has less exposure while experiencing the same pressures. * GCC members: Saudi Arabia, Qatar, Oman, Bahrain, United Arab Emirates, and Kuwait

The decline in oil prices from 2014's levels has pressured government spending in Gulf Cooperation Council (GCC)* countries. This long-term change in the region's economic model has started to impact healthcare policy, resulting in less generous benefits. The region is a significant source of "medical tourism" for several countries such as the the UK, Germany, US, and Thailand. Bumrungrad Hospital PCL (BH: TB), -21% YTD, has significant exposure to this change. In particular, expectations that Bumrungrad's EPS growth will accelerate to 10% in 2017 from 0% in 2016 look optimistic given the nature and timing of these changes. Bangkok Dusit Medical Services PCL (BDMS: TB) has less exposure while experiencing the same pressures. * GCC members: Saudi Arabia, Qatar, Oman, Bahrain, United Arab Emirates, and Kuwait

Bumrungrad Hospital Pub Co

The Oil Slick That Reached Bangkok