On Thursday at 10:59 AM (Bangkok time), the share price of Bumrungrad Hospital Public Company Limited (SET: BH) plummeted by 8.02% or THB 21.00 to THB 241.00, with a trading value of THB 3.02 billion.
Land and Houses Securities (LHS) disclosed that BH posted stagnant year-on-year net profit growth in 3Q24, marking the first time in 13 years. The analyst downgraded the company’s rating to ‘Hold’.
BH recorded a slim 1.2% quarter-on-quarter increase, reaching THB 1,955 million in net profit for 3Q24 despite the period being the peak season. The company reported a flat year-on-year growth, attributed to a 5% year-on-year decrease in revenue from hospital operations, particularly a 6.8% drop in revenue from non-Thai patients. This could be due to a considerable decrease in Kuwaiti patients, as the Kuwaiti government is deliberating on overseas hospitals eligible for insurance claims. Additionally, revenue from Thai patients also dipped by 1.4% year-on-year, potentially due to a slowdown in purchasing power within the country.
Meanwhile, BH effectively managed its hospital expenses, resulting in an 8.4% cost reduction. This development contributed to the growth of the company’s Gross Profit Margin (GPM) from 49.8% in 3Q23 to 51.6% in 3Q24. Moreover, BH demonstrated efficient control over Selling, General, and Administrative (SG&A) expenses, which decreased by 1.1% year-on-year, despite a YoY surge of THB 11 million in marketing expenditures.
Despite a decrease in revenue compared to the previous year, BH managed to maintain flat net profit growth, signaling a shift from its prior growth pattern. The company posted a net profit of THB 5,872 million in 9M24, marking an 11% year-on-year increase. This amount accounts for 74% of LHS’s projected full-year profit.
LHS anticipates a decline in BH’s net profit in 4Q24 following the peak season, and is reassessing the full-year profit forecasts for both 2024 and 2025. Initially, BH was expected to achieve profit growth of up to 10% in 2024 and around 5% in 2025.
LHS has revised downward BH’s base price for 2025 to THB 275 per share, indicating a limited 4.7% upside from the current price. Furthermore, the analyst downgraded BH’s rating to ‘Hold’ and advised investors to consider investing in BDMS instead. BDMS has been identified as a preferable option due to its sustained growth, with a set target price of THB 36 per share.
