Krungsri Securities (KSS) stated in its report that Bumrungrad Hospital Public Company Limited (SET: BH)’s financial performance for the first quarter of 2025 is projected to reveal a net profit of 1.69 billion baht, marking declines of 15% year-on-year and 11% quarter-on-quarter.
The decrease is attributed to multiple factors: anticipated revenue drops of 6% year-on-year and 5% quarter-on-quarter tied to reduced service utilization and treatment intensity according to the severity of conditions.
This decline is compounded by the absence of the “Kuwait effect” in the first quarter of 2024 and the timing of Ramadan affecting Middle Eastern patient numbers through March.
Cost control measures are expected to continue, without additional staff expenses as seen in 1Q24 and 4Q24, leading to a projected 3% year-on-year and 13% quarter-on-quarter decrease in SG&A expenses. This efficiency is anticipated to improve the EBITDA margin to 36.8% quarter-on-quarter.
The analyst revised the forecast for BH’s net profit in 2025 to 2027 downward by 2% to 3%, resulting in projections of 7.692 billion baht, 8.075 billion baht, and 8.42 billion baht respectively. This adjustment reflects a slower recovery in outpatient and inpatient department services than previously expected, reducing revenue predictions by 2% to 4% from earlier estimates.
For 2025, net profit is expected to dip 1% year-on-year, whereas 2026 and 2027 are anticipated to experience a 5% compound annual growth rate (CAGR) as revenues are predicted to rise at 4% CAGR.
KSS noted that should the first-quarter results align with expectations, the figures would account for 22% of the analyst’s 2025 net profit forecast. Looking ahead to the second quarter of 2025, a rebound in net profit is expected due to rising revenue from core Middle Eastern patients post-Ramadan.
The analyst gives a ‘Buy’ recommendation for BH, with a revised target price of 240 baht per share, down from 260 baht, based on a discounted cash flow (DCF) valuation with a weighted average cost of capital (WACC) of 6.9%, previously 6.8%.
Recovery in revenue and profit is anticipated starting from the second quarter of 2025, with the second half of 2025 expected to show year-on-year and half-on-half growth due to seasonal service utilization and increased treatment intensity. Moreover, BH’s share price represents a compelling investment opportunity, trading at a forward price-to-earnings (PE) ratio equivalent to below -1.0 standard deviation (SD).
