Equity Analysis /

Thai: Healthcare - 4Q22 earnings playbook; full-throttle fly-in patient recovery

  • Strong earnings growth outlook for 4Q22

  • 2023 growth outlook strong for high-end hospitals

  • Valuations and preferences

Bualuang Securities
24 January 2023

The Healthcare sector will mark a strong profit outperformance for 4Q22 (and BCH will post a QoQ turn-around). We like BDMS and BH most, as the best plays on the full-throttle recovery in fly-in business that should be sustained through 1H23!

Strong earnings growth outlook for 4Q22

We have upsized our 2022 core earnings projections by 9% for BDMS and by 1% for BCH in order to factor in the release of pent-up demand among non-COVID patients and the full-throttle recovery of fly-in business. But we have cut our CHG 2022 profit estimate by 8%. Our new models suggest aggregate Healthcare coverage 4Q22 core earnings of Bt5.1bn, up 7% QoQ (a turnaround at BCH and a normalized CHG operation) but down 35% YoY from the 4Q21 record of Bt7.76bn (the windfall from the Delta variant). Core margin is assumed at 15.5%, down 610bps YoY (a Delta variant-fueled record of 21.4% in 4Q21) but up 190bps YoY.