Hospital stocks in Thailand are now trading at nosebleed levels with the sector average at ~50x PE, but what I’ve learnt from the past, just because a company has a high PE doesn’t mean you should ignore it if the compounded growth potential is there. Here are some snippets and the link to the rest of the article
That’s clouding the outlook for Thailand’s health-care shares, which surged more than 800 percent over the past seven years, as valuations start to look stretched amid the falling demand. Bangkok’s Bumrungrad Hospital Plc, known as the grandaddy of international clinics, has slumped 16 percent since early March after patient volumes from the United Arab Emirates, its second-biggest source of overseas visitors, fell 20 percent in the first quarter.
Sitting at the apex of the industry is Bumrungrad, which attracts more than half a million foreign patients a year and has a network of 32 referral offices everywhere from Mongolia to Ethiopia. Sixty-seven percent of revenue came from overseas visitors last quarter, company figures show. Myanmar residents were the biggest source, accounting for 8.4 percent of total patients, followed by 8.3 percent from the U.A.E. and 5.9 percent from Oman
- Cabinet nod for B2bn AIIB initial payment — The cabinet yesterday approved an initial payment of 2 billion baht from the central budget to the China-led Asian Infrastructure Investment Bank (AIIB). Thailand, which wants to become a full member of the bank, was required to make the payment before the AIIB holds its first annual meeting on June 25 and 26 in Beijing. (Bangkok Post, 25/5/16)
- Exports fall 8% in April – Thai exports slipped back in April after two months of growth, hit by continued weak global demand and falling commodity and oil prices. (Bangkok Post, 26/5/16)
- Three electric train auctions set for June – Three electric train projects worth a total of over 200 billion baht will be auctioned next month, says Deputy Prime Minister Somkid Jatusripitak. The three are the Orange Line connecting Thailand Cultural Centre with Min Buri, worth 110 billion baht; the Pink Line from Khae Rai to Min Buri, worth 56.6 billion baht; and the Yellow Line from Lat Phrao to Samrong, worth 54.6 billion baht. (Bangkok Post, 26/5/16)
- THE PRICE of rice in the domestic market is expected to increase by about 5-10 per cent late in the year after drought lowers the supply – The price of packed rice has increased by about Bt5-7.50 per 5-kilogram pack since the beginning of this year, but is still under the government’s official ceiling, he said. However, the supply of rice continues to drop, the price could increase in the third or fourth quarter of the year, Somkiat said. However, rice packers will not immediately increase retail prices as there are still enough stocks to last until September. (The Nation, 24/5/16)
It’s been in the news for a while that BEM has been fighting with EXAT to get back someTHB 8 bn in lost revenue..
“The Expressway Authority of Thailand (Exat) has decided to petition the Administrative Court, asking it to revoke an arbitration committee’s order that it pay more than 8 billion baht in compensation to Bangkok Expressway and Metro Plc (BEM) over a toll hike dispute. “
…for the following reasons…
In” 2003, Exat and BEM became involved in a dispute about raising toll fees on the second-stage expressway system. BEM is responsible for the section management, including collecting toll fees.
Under the contract, the fees must be raised every five years by between five and 10 baht. The increase depends on the Consumer Price Index in that year.
Exat in 2003 did not permit a toll rise after it took the view the index point level should be rounded down, with the result it failed to reach the point where the hike would be five baht. BEM insisted it should be rounded up to make the increase five baht.
On Feb 12 this year, the arbitration committee ruled Exat must pay BEM compensation of 8.16 billion baht, including an interest payment of 3.77 billion baht.”
…so just imagine what if they do win? note 1Q16 revenues and profits were THB 3.1 bn and THB 700mn respectively.
Source: Bangkok Post