STOCK FOCUS
Bangkok Dusit Medical Services
Phatra Securities has made a "buy" recommendation on shares of Bangkok Dusit Medical Services, with a 12-month price objective of Bt40.70 apiece.
Thanks to economies of scale, improved management efficiency and better standards of medical services and equipment, the turn-round of Samitivej Hospital Group and BNH Medical Centre operations should be key drivers for the bottom line of Bangkok Dusit Medical Services.The proportion of Samitivej and BNH earnings before interest and tax (EBIT) should rise to 24 per cent and 7 per cent, respectively, of their parent company's total EBIT in 2010, compared with 16 per cent and 4 per cent last year. The outlook for Thailand's healthcare services is promising and should provide secular growth for private operators, driven by the balance between healthcare expenses and gross domestic product per capita. Longer life expectancy is a catalyst, while booming medical tourism also offers opportunities for Bangkok Dusit Medical Services. The company is Thailand's largest private-hospital group and should be a key beneficiary, because hospitals have a long development cycle in building reputations and trust among patients. This is coupled with limited health resources, protective regulations and high investment costs. Thailand has the potential to be a medical-tourism hub, given its competitive advantages in high-quality services and affordability.
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