UOB Kay Hian raised its rating for Thailand’s healthcare sector to “market weight” in response to China’s reopening optimism.
The brokerage predicted that the sector will benefit from China’s reopening, particularly in the fields of in-vitro fertilization (IVF), Covid-19 screening tests, and the sale of mRNA vaccines, resulting in a boost in sector earnings this year, particularly in the first half of the year.
Top stock picks are Bangkok Chain Hospital (SET:BCH/TP:THB21.2) and Chularat Hospital (SET:CHG/TP:THB3.4), both of which could benefit from providing to Chinese tourists with Covid-19-related services. UOB Kay Hian favors BCH due to a more favorable valuation.
While Chinese patients may not make up the bulk of those seen in Thai private hospitals, they still pose a significant potential for the country’s healthcare sector because of China’s massive population. Thai IVF clinics mostly focus on the Chinese market.
Other healthcare centers that are expected to benefit from China’s reopening include Bumrungrad Hospital (SET:BH) and Bangkok Dusit Medical Services (SET:BDMS).
Thailand expects 7-10 million visitors from China in 2023, topping its earlier forecast for 5 million arrivals from the world’s second largest economy that recently reopened its border.
The Health Minister Anutin Charnvirakul on Monday revoked rules from the aviation regulator on the weekend that required visitors to show proof of Covid-19 vaccination.
The health ministry told reporters that proof of vaccination was not needed as there was sufficient immunization globally. He also noted that unvaccinated tourists will be allowed to enter without restrictions as well.
