TerraBKK Research has observed that the 2017 performance of the hospital sector is quite interesting, with revenue figures consistently growing due to several factors. These include the growth of health tourism in Thailand, primarily from neighboring countries and mainland China. Meanwhile, growth from other regions, such as the Gulf states and the Middle East, remains stable, while the domestic market continues to expand. The rate of illness and mortality from serious non-communicable diseases among Thais is increasing, such as heart disease, cancer, and diabetes. All of this contributes to a rising demand for medical services, especially in the second half of the year when there are outbreaks or other communicable diseases. Therefore, it is not surprising that many large hospitals have plans to invest in expanding their business performance to accommodate more patients.

           

When comparing the performance based on year-over-year total revenue, TerraBKK Research found that almost all hospitals have seen revenue increases consistently from 2015 to 2017. The top 5 hospitals with the highest average revenue growth are Sikarin Hospital (SKR), Thonburi Medical Center (KDH), Sri Vichai Hospital (VIH), Rajthani Hospital (RJH), and Bangkok Chain Hospital (BCH). (This article does not include securities listed on the stock market in 2017 due to insufficient data, such as Rajapruek Hospital (RPH), Trang Vattanapat Hospital (WPH), and Thonburi Healthcare Group (THG)).


           TerraBKK Research categorizes the performance of hospitals into three revenue levels:

           1. Ten Billion Baht Level includes three hospitals: Bangkok Dusit Medical Services (BDMS), Bumrungrad Hospital (BH), and Samitivej Hospital (SVH). The performance of Bangkok Dusit Medical Services (BDMS) generates the highest revenue in this industry, while the highest financial ratio belongs to Bumrungrad Hospital (BH), despite a decline in ROE in 2017 compared to the previous year, while ROA and NPM saw slight increases.


          2. One Billion Baht Level is the largest group in this industry, consisting of well-known hospitals such as Chularat Hospital (CHG), Ramkhamhaeng Hospital (RAM), and Vibhavadi Hospital (VIBHA). The performance of Bangkok Chain Hospital (BCH) generates the highest revenue in this billion-baht group, while Nonthavej Hospital (NTV) operates with the highest ROE and ROA ratios in the group, and the highest net profit margin (NPM) belongs to Ramkhamhaeng Hospital (RAM).

          3. One Hundred Million Baht Level includes hospitals like Vattanakorn Medical (NEW), Thonburi Medical Center (KDH), and Ekachai Medical (EKH). Although the performance of Thonburi Medical Center (KDH) generates the highest revenue in this group, it is still operating at a loss, although the trend of losses is decreasing due to the opening of more specialized medical centers, which has increased operational costs, such as medical personnel. In terms of financial ratios, Ekachai Medical (EKH) performs best in this group.

          Recently, TerraBKK Research summarized the Q1 2018 performance of the hospital sector including total revenue and net profit details as follows:

          TerraBKK Research found that total revenue increased at all hospitals, averaging 12.5-20% from the same period last year, while net profit also increased. This overall growth is attributed to the rise in the number of patients, both critically ill and seasonal epidemic cases, effective cost and expense management, and increased revenue from newly opened branches, among other factors. ---TerraBKK

Article by: TerraBKK Investment Tips
TerraBKK Find good homes, value for money, low prices