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Bumrungrad Hospital
Tisco Securities has upgraded its recommendation on Bumrungrad Hospital shares, with a 12-month target price of Bt63 apiece.
Bumrungrad Hospital was awarded a four-year contract to run al-Mafraq Hospital in Abu Dhabi. The hospital has an inpatient capacity of 460 acute-care beds, plus 14 intensive-care beds and 14 special-care infant beds. An estimated 310,000 patients are expected to use the hospital each year.A new hospital building will be constructed on an adjacent site, starting this year. Based on the projected number of patients, the broker assumed revenue growth for the inpatient and outpatient departments of 1.5 times the current Bumrungrad Hospital rate and 3-per-cent growth in the number of visits per annum. The brokerage estimates the deal will generate Bt130 million for Bumrungrad International, of which Bt41 million would go to Bumrungrad Hospital, based on its 31.5-per-cent stake in Bumrungrad International. The brokerage then revised its earnings estimates for the years 2008, 2009 and 2010 upward by 1.6 per cent, 0.8 per cent and 0.8 per cent. Key risks include political instability that could scare away foreign visitors and higher-than-expected costs associated with new hospital-management contracts.
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