Kiatnakin Phatra Securities (KKPS) has raised the target price of Bumrungrad Hospital Public Company Limited (SET: BH) to THB 250 per share to reflect strong demand with a positive outlook for the new Phuket hospital.
The brokerage company raised BH’s revenue growth assumption for 2023 to 17%, up from 12%. The recent announcement of a new 150-bed hospital in Phuket, which is expected to open in 2025-26, should also further drive BH’s longer-term growth from 8% to 10% in 2026 moving forward.
KKPS expected margins to remain high despite the ongoing talent war, supported by stronger revenue growth and management’s cost control. Due to this reason, net margin is now expected to remain strong at 23.9%, 23.7% and 24.2% from 2023-25, respectively. Meanwhile, earning growth is expected at 17%, 12% and 15% in the same period as mentioned before.
Despite strong operation in 1Q23 from pent-up demand as international patients returned post re-opening, KKPS expected to soften QoQ into 2Q23 due to seasonality. Meanwhile, growth should mormalize into 2H23 due to the higher base starting in 2H22 when international patients rebounded.
In addition, KKPS noted that despite raising the target price and forecasts, the current share price, which has already increased more than 50% over the past year, offers limited further upside. Thus, the firm reiterated its ‘Neutral’ view on the stock.
