Equity Analysis /

Thailand: Healthcare - Post-results calls with companies

  • BCH and CHG are the most confident over the 4Q22 outlook

  • All hospitals are optimistic over prospects for 2023

  • Valuation talks

Bualuang Securities
30 November 2022

Mid-tier hospital operators marked weak 3Q22 profits, but strong recoveries are in progress. We have shifted our top picks from big-caps to mid-caps (BCH and CHG). The managers of BCH and CHG are optimistic over the outlook for 4Q22 and 2023. BUY!

BCH and CHG are the most confident over the 4Q22 outlook

For 4Q22, we expect a YoY and QoQ dive in the aggregate profit of our Healthcare coverage. BDMS will mark a YoY and QoQ core earnings plunge for the quarter. BH’s core number will jump YoY but drop QoQ on seasonality. In contrast, BCH, will mark a turnaround to black ink from a core loss for 3Q22 (due to a devaluation of inventories and advanced payment for Moderna vaccines). CHG’s core earnings will decline YoY but rise QoQ from a low 3Q22 base. BCH and CHG both expressed confidence over their respective outlooks for 4Q22 revenue and profit growth—all the bad stuff was marked to their 3Q22 financial statements. And BCH and CHG will both book one-time extra income for chronic treatments (we expect Bt300-500m for BCH and Bt150-200m for CHG).