Bumrungrad Hospital
Prompt growth still unseen in short term Reiterate "HOLD"
Bumrungrad Hospital Plc (BH)
3Q12 norm profit increases 16.2% as projected due to high season
BH’s net profit in 3Q12 stands at B1,180, increasing by 1.36x
from 2Q12 due mainly to extraordinary profit from selling of
investment in KH at B608m. If only normal item is considered,
the company’s norm profit would be B552m or 16.2% QoQ
increase as projected due to the following factors: 1) the service
revenue that has risen only by 3.7% QoQ as a result of high
season, 2) the gross profit margin that has ascended from
39.7% in 2Q12 to 40.2%, 3) the selling and administrative
expenses that have stabilized close to the prior quarter, and 4)
the effective tax rate that is lower than usual due to tax benefits
from selling of investment in ABSPC.
FY2012 profit still goes with projection, anticipating to grow more 12% in 2013
Although 9M12 norm profit is considered 76.6% of FY2013
forecast, 4Q12 profit is likely to weaken from 3Q12 along with
the season. Accordingly, FY2012 actual net profit is projected to
be close our FY2012 forecast. We maintain our forecast,
projecting FY2012 net profit at B2,697m or 69.8% increase from
the preceding year while 2012 norm profit would stand at
B2,089m or 31.5% increase, growing continuously by 12.2% in
2013. This would be a result of the plan of opening additional
service area for outpatients in 5 floors of the BIC building in
early-2013 and increasing the number of beds for inpatients by
8 beds by 2012 to 48 beds in total in the next 3 years. In
addition, BH has a plan to get a building constructed to use as a
clinic for outpatients on new Petchburi Rd. At Sukhumvit Soi 1
(which is near BH), land and construction worth of B1bn have
been bought for future service expansion.
Upside left at 15%. Prompt growth still unseen in short term. Reiterate “HOLD”
Despite the company’s plan of aggressive branch expansion, it
will take 3-5 years to complete the construction before
beginning operation. Accordingly, prompt growth is still not seen
in a short term. According to 2013 fair value, using DCF, at B87
with only 15%
