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Thailand’s hospital providers have seen their earnings for the 2nd quarter 2022 surge and was the only sectors after petrochemical that saw their profitability rise by such high numbers.
Hospital providers, which benefitted from the surge in Covid-19 cases and the hospitalization of patients either in hospitals or in the so called ‘hospitel’ (a hotel turned into hospital kind of arrangement), are also starting to see some return of ‘medical tourism’ as the country starts to open up its borders.
“We expect our covered hospital stocks to report a 5.6 billion Baht aggregate profit in Q2 2022, down 30.5% quarter-on-quarter (QoQ) but up 61.9% year-on-year (YoY),” Attaphol Tisayukata, analyst at TISCO Securities said in a note recently and he was absolutely correct in his assessment of a surge in profits as most hospitals that have come out to announce their results have all shown significant improvement.
He said that the significant increase YoY is thanks to COVID revenue from the Omicron variant and return of international medical tourists. He added that one should note that the 2nd quarter of 2021 was a low base due to lack of international arrivals as well as the beginning of the Alpha variant.
According to TISCO, the month of April recorded an average of 20,000 daily cases treated at hospitals which was close to March 2022’s peak of 23,000, however, the situation significantly improved in May as the number of daily cases treated at hospitals fell to only 6,400.
This he says, would help hospitals record some extraordinary revenue from Covid-19 in 2nd quarter like those seen during Q1 2022, but to a lesser extent as the average daily case treated at hospitals dropped from 15,600/day in Q1 2022 to 9,900/day in Q2 2022.
Bangkok Dusit Medical Services Plc (BDMS)
BDMS, the country’s single largest private hospital group which has a market capitalization of 449 billion Baht, reported a net profit of 2.66 billion Baht against 1.45 billion Baht it recorded during the same period of last year.
The company said that its revenues for the quarter stood at 21.98 billion Baht, an increase of 26% from the same period of last year and key driver for the revenue was the fact that local patients revenues surged by 18% YoY and international patients’ revenue surged by 69% YoY.
The key non-Thai patient segments during the quarter were the Middle East (+388% YoY), Australia (+175% YoY), and CLMV (+120% YoY).
Covid-19 related services accounted for 12% of total revenue vs 11% in 2Q21 and 18% in 1Q22. Excluding Covid-19 revenue, revenue still grew 25%.
“We expect revenue from Covid-19 contribution to slow with the Omicron situation improving and international patient activity should improve from the seasonally low 2Q22. We maintain a Buy with a target price of 32 Baht/share,” Attaphol says.
Bumrungrad Hospital Plc. (BH)
BH revealed through the Stock Exchange of Thailand (SET) that the second quarter of 2022 operating results showed a profit of 1.17 billion Baht, an increase of 438.6% compared to the same period last year with a profit of 216.46 million Baht.
BH’s Q2 2022 revenue grew 64% YoY and 19% QoQ. The YoY jump followed Thailand’s reopening to foreign arrivals. BH’s Thai patient revenue rose 15% YoY while non-Thai patient revenue surged 122%.
The rise in non-Thai patients shifted the Thai to non-Thai revenue ratio from 54:46 to 38:62.
Overall, BH’s revenue for 2Q22 was above 2Q19A, beating pre-Covid levels. Thai revenue and non-Thai revenue are now above 2019 levels by 27.8% and 7.8% respectively
The company reported 2Q22 consolidated revenue at 4.954 billion Baht, an increase of 64% from 3.02 billion Baht in 2Q21. The revenue from hospital operations was 4.903 billion Baht, an increase of 64.5% from 2.98 billion Baht in the second quarter of 2021, mainly due to an increase in income from foreign patients and Thai patients by 120.8% and 15.8%, respectively.
As for the operating results for the first half of the year, the profit was 1.89 billion Baht, an increase of 514.8% compared to the same period of the year 2021 with a profit of 307.59 million Baht.
For the first half of the year, the company had total revenue of 9.106 billion Baht, an increase of 59.9% from 5.694 billion Baht in the first half of the year 2021.
“BH reported Q2 2022 earnings of 1.17 billion Baht, up 439% YoY and 61% QoQ. The result beat our estimate and consensus by 85% and 63%, respectively,” Atthapol said.
Thonburi Healthcare Group Plc. (THG)
THG revealed that in the second quarter of 2022, the company’s profit was 398.10 million Baht, an increase of 374% from the same period last year with a profit of 84.16 million Baht.
The total revenue was at 2.674 billion Baht, an increase of 40.3% from Q2 2021 benefiting from higher access to services compared to the previous year, coupled with cost and expense controls resulting in a significant increase in net profit.
In this quarter, THG received an increase in profit sharing from investments in another associated company by increasing the proportion of its existing investments, thus, at present, THG has 3 associated companies.
For the first six months of 2022, the profit turned 924.90 million Baht from a loss of 130.78 million Baht in the same period of the year 2021, or an increase of 806%, with THG’s total income for the six months of 6.204 billion Baht, an increase of 78.7% due to the adaptation to the changes under appropriate medical standards both in terms of prevention, treatment, and rehabilitation, such as the collaboration with hoteliers to provide ‘hospitel’ services for patients with mild symptoms, the establishment of a field hospital, providing alternative vaccination services and government vaccination through a network of more than 18 hospitals to fully support those affected by COVID-19.
TISCO said that THG reported a net profit of 398 million, a 373% increase YoY but a 24% decline QoQ, beating TISCO’s estimate by 89%.
Rajthanee Hospital Plc.
RJH revealed that in Q2 2022, the company had a profit of 421.66 million Baht, an increase of 283.97 million Baht or 206.25% from the same period in 2021 with a profit of 137.69 million Baht.
This was due to an 89% increase in total revenue compared to the same quarter last year, with the majority of the increase coming from general patients which grew by 130% compared to the same quarter last year.
Whereas social security income increased 10%, for non-covid-19 patients, while the revenue from regular patients was 130.2 million Baht, an increase of 8.8% compared to the same quarter last year.
As for the first 2 quarters, RJH received a total profit of 894.22 million Baht compared to 244.32 million Baht from the previous year or an increase of 266.01%.
Principal Capital Plc. (PRINC)
In Q2 2022, PRINC’s revenue increased to 733.3 million Baht, an increase of 87.6% compared to the same period last year due to increased revenue from all hospitals, especially Prince Suvarnabhumi Hospital, which had a revenue increase of 233.4 million Baht (96.0%), Prince Lamphun Hospital 93.6 million Baht (234.2%), Virajsilp Hospital 56.0 million Baht (100.4%), Prince Hospital Ubon Ratchathani 38.9 million Baht (182.1%), and Prince Sisaket Hospital 28.0 million Baht (158.5%).
The main factor that causes all income to rise was customers who come for regular check-ups and those who come for COVID-19 treatment.
As for the first half of 2022, PRINC received a total profit of 555.67 million Baht compared to -315.84 million Baht from the previous year.
Mahachai Hospital Plc (M-CHAI)
M-CHAI, which seldomly give more details than that is needed said its net profit for the quarter ending June 2022 stood at 134.97 million Baht and increase of 105.03 million Baht or 350.71% due to the follow main reasons.
- Revenue from hospital operations increased by 420.72 million Baht or 42.22 % due to the revenue from new subsidiary started more operation.
- Cost of hospital operations increased by 232.17 million Baht or 27.20 % due to medicine, the medical supply and Medical personal expenses, staff expenses.
Vibhavadi Medical Centre Plc (VIBHA)
VIBHA, which is a major shareholder of another listed medical service provider – Ramhkhamhaeng Hospital Plc (RAM), came out to say that it reported a net profit of 337.56 million Baht, comparing at the same period in 2021 representing 24.33% increase. This is mainly due to:
- VIBHA and its subsidiary have total incomes amount 2.44 billion Baht comparing at the same period in Q2 2021representing 44.60% increase
- In Q2 2022 VIBHA had received dividend from investment to the tune of 120.12 million Baht, an increase of 59.97 million Baht from the previous year, or 99.72% increase.
Chularat Hospital Plc (CHG)
In 2Q22, the Company has revenues from hospital operations of Baht 2,784.5 million, increasing by Baht 713.5 million, or 34% YoY
Revenue from general patients in Q2 2022 increased by 25% YoY. The revenue from outpatients (OPD) increased by 83.84 million Baht and inpatients (IPD) increased by 170.64 million Baht mainly from alternative vaccination service and the return of general patients.
Revenue from Social Security scheme in Q2 2022 increased by 12% YoY driven by the increased number of the registered member and the return of inpatients with higher cost for caring.
For the 6-months ending June 2022, CHG had revenues from hospital operations of 6.36 billion Baht, increasing by 2.87 billion Baht, or 82% YoY.
Revenue from general patients in during the 6-months of 2022 increased by 49% YoY. The revenue from outpatients (OPD) increased by 491.17 million Baht and inpatients ( IPD) increased by 422.68 million Baht mainly driven by the return of general patients as well as the international patients as the COVID-19 situation began to unfold and the country reopening, including an additional revenue from alternative vaccination service.
Analysts expect that BCH’s strong earnings are expected in the 1st six months of 2022 with normalized operations from 2023 onwards.
“We expect 2023-24e earnings to jump 103-127% above the 2019 level as the new hospitals reach maturity, SSO (Social Security Office) contribution increases, and contribution from managed hospitals kicks in,” Tisco’s Atthapol says.