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
ARIP expects profit to turnaround this year on the back of expansion into digital marketing arena which should generate revenue around Bt10-15mn. It targets 2016 revenue of Bt300mn. It expects to finalize 2 organizer deals abroad in 1Q16. (Thun Hoon, 22/01/16)
BIG plans to pay dividend after it has wiped out the negative retained earnings. It expects 2016 revenue to mark a record high aided by government policy and opening of new branches. (Thun Hoon, 22/01/16)
Comment: Doubt the sustainability of this, hope for their sake that I’m proven wrong but still have my doubts…
CHG resolved to complete its acquisition of Ruampat Payong Hospital, valued at Bt117mn, effective Mar 1, 2016. (Thun Hoon, 22/01/16)
Comment: The most expensive hospital stock in Thailand today…which does say a lot.
EA expects 4Q15 earnings of Bt683mn (+86%), brought 2015 earnings to Bt2.8bn thanks to full-year contribution from solar farm. (Khao Hoon, 22/01/16)
Comment: Again everything is still on track here for EA
Buy(s) THB 463 mn
- BA – And he continues to buy and buy and buy and buy
- SAM – Seems to be a trade between shareholders
- DCORP – A first time to see this name on the management buy list, perhaps worth a look.
- IFEC – Same as SAM, never cared for IFEC, perhaps one of the most obviously manipulated stocks in the thai market with management most likely behind it (of course this is just speculation….)
Sell(s) THB 158 mn
- SAM – See above
- IFEC – See above
- CHG – This director/shareholder has been selling his shares ever since they ipo’ed..in the meantime the stock price has doubled.
Names today: CHG, COM7, CPN, DRT, EFORL, JTS, KC, KTC, MC, NYT, PLANB, PTT, PYLON, SLP, SMT, TCMC, TPAC
CHG expects to acquire one hospital this year. It expects 1-2 deals to be concluded next year. It expects its expansion plan to raise revenue by 18-20% this year from 2014’s Bt2.7bn. It expects net profit to grow 15% from 2014’s 480mn. Both local and foreign investors are interested in CHG shares. (Thun Hoon, 21/10/15)
Comment: Hence why CHG being viewed as a future BDMS. It does beg the question, why did management sell so many shares between 11-12 baht (pre stock split)
COM7 expects to benefit from launch of iPhone 6S. It expects this to increase sales and net profit in 4Q15. It expects 3Q15 earnings of Bt59mn. It expects 2015 net profit of Bt271mn (+29%). (Khao Hoon, 21/10/15)
Comment: As commented yesterday, buy on the Iphone releases (we call this funnymentals)
CPN expects 2015 revenue to grow 10%. It plans to open CentralFestival Eastville valued at Bt6bn on Nov 27. It has budgeted Bt300mn for a marketing campaign to boost sales in 4Q15. (Khao Hoon, 21/10/15)
DRT expects 2015 net profit to be better than last year. It targets 2016 revenue growth of 5%. It expects government stimulus to lift sales in 4Q15. It plans to increase capacity. (Thun Hoon, 21/10/15)