Earnings Report /
Thailand

Bumrungrad Hospital PCL: Deep miss! QoQ recovery in 3Q20

  • Miss our expectation and the street by a country mile

  • BH posted a net profit just Bt44m for 2Q20

  • The core number was 77% below our estimate

Bualuang Securities
7 August 2020

The stock price fall already reflects weak 2Q20 numbers and a poor 2020 outlook. Once the shock of the 2Q20 result passes, we expect the market to bid the price back up in anticipation of a 2021 earnings recovery, driven by the return of fly-in business. We suggest loading BH for the long-term. The stock currently trades at a 2021 PER of 29.0x, near its global peer mean. Our BUY call stands with a rolled over investment horizon to YE21 and a new DCF-derived target price of Bt126 (7.0% WACC and 2% terminal growth).

Miss our expectation and the street by a country mile

BH posted a net profit just Bt44m for 2Q20. Excluding an FX loss, core profit would be Bt48m, down by 94% YoY and 94% QoQ. The core number was 77% below our estimate and missed the consensus by a whopping 82%, due to a much slimmer core margin than assumed. BH announced an interim DPS of Bt1.15 for 1H20, a 1.1% simple yield (XD Aug 19, payment Sep 5).