Bumrungrad sets up HK holding company for overseas investment

BH vice chairman Charnvit Tanphiphat said the company had established Life and Longevity in Hong Kong on Thursday with registered capital of US$100,000 (Bt3.1 million).

The holding company will be used to invest in BH’s overseas businesses, he said.

BH is interested in a Hong Kong-based hospital business that Fortis Group is planning to sell off following the group’s unsatisfactory performance, according to a source in the business.

However, it has seen no progress after long-time negotiations, given the potential risks to overseas investment.

"There has been news on many occasions that Bumrungrad Hospital will go for investment abroad, including in Hong Kong and Mongolia. But nothing is yet clear. It’s similar with the Fortis deal, which has made no progress in Hong Kong," said the source.

According to research by Asia Plus Securities, BH is expected to see a 19.4-per-cent rise in year-on-year profit from normal operations for the third quarter, after an improvement in cost control and its income expected to come in on target.

However, third-quarter net profit is expected to drop 47.7 per cent year on year to Bt617 million, given last year’s liquidation of investment in Bangkok Chain Hospital for Bt664 million, the brokerage house said.

In the current quarter, BH's profit is expected to be lower than in the previous three months due to seasonal factors, it added.

There could, however, be a boost for normal profit this year from winter diseases and the high season for Thailand’s tourism, a 30-per-cent rise in the workforce for outpatient services and a 5-per-cent increase for inpatient services, said Asia Plus Securities.

Profit growth is estimated at 17 per cent for the full year, while next year’s profit growth is projected at 15 per cent.

To cope with long-term growth after the Asean Economic Community’s implementation in 2015, BH plans to construct a seven- or eight-storey building, which will be located about 50 metres from the current hospital building.

The planned facility will consist of laboratories, a health inspection centre and a rehabilitation department. The construction period is expected to be about two years.

Another planned high-rise building, in New Phetchaburi Road, will be used as BH’s child and woman inspection centre. Construction is expected to take three years.

BH is also said to be eyeing plots of land, or the purchase of other hospitals as second-brand medium-end hospitals, in Bangkok for the expansion of its income base.

Finansia Syrus Securities forecasts BH’s third-quarter net profit at Bt672 million, up 16.1 per cent from the previous quarter and 30.3 per cent from the same period last year, due to its high season and higher average healthcare fees.

Given the hospital’s area increase to accommodate more patients, the brokerage house is leaving its estimate for BH’s profit growth at 21.2 per cent this year, and at 12.4 per cent for 2014.