Broker expects Thai Nakarin to be best-performing hospital in 2009

The broker said in a new study that in its view, Thai Nakarin was a small-scale hospital with high growth potential.

The hospital had a compound annual growth rate (CAGR) of 84 per cent per annum from 2006 to 2008, thanks to high population growth in the areas near Suvarnabhumi Airport, and to the hospital's success in expanding its specialised medical services, which are seen as its strength.

Located on Bang Na-Trat Road, Thai Nakarin is the only hospital in a 10-kilometre radius of Suvarnabhumi Airport that has integrated specialised medical services, including a heart centre, cancer centre and bone and joint centre, according to the study.

The broker said Thai Nakarin would suffer less of an impact from the economic slowdown than larger hospitals because 95 per cent of its patients are local residents.

Moreover, the hospital stands to benefit from the fact that some medical suppliers and services have increased prices since the fourth quarter of last year, and from an increase in revenue since it opened its cancer centre in the second quarter of 2008.

Thai Nakarin plans to open a neurology centre in the second half of this year, which should boost the hospital's revenue growth even further, the study said.

Ayudhya Securities forecast Thai Nakarin's revenue for the year ending July 2009 would grow 9.5 per cent from last year - less than the hospital's projection of 14 per cent to 15 per cent.

The broker also predicts the hospital will post a net profit of Bt145 million, an increase of 13 per cent from last year - higher than the hospital sector's average, which is expected to decline by 1.5 per cent.

Thai Nakarin is also expected to see a return on equity of 33 per cent for 2009 to 2010 - the highest figure in the hospital sector.

Thai Nakarin booked net profit of Bt95.60 million in the first six months of the fiscal year ended January 2009, up 83.69 per cent from the same period last year. The hospital's net profit in the first half of its fiscal year accounted for 66 per cent of Ayudhya Securities' full-year forecast.

Thai Nakarin Hospital this year is likely to show the highest growth among hospitals listed in the Thai bourse, according to Ayudhya Securities.

The broker said in its research that Thai Nakarin was the small-scale hospital that have high potential growth in its view. The hospital had Compound Annual Growth Rate (CAGR) of 84 per cent per annum in the past three years (2006-2008) because it benefited from the population expansion who lived nearby the Suvarnabhumi Airport and the success in specialise medical services expansion, the hospital's strength.

Thai Nakarin is the only hospital within 10 kilometres-radius of the Suvarnabhumi Airport that has integrated specialised medical services, including heart centre, cancer centre and bone and joint centre, according to the research.

The broker said Thai Nakarin would have less impact from economic slowdown if compared with large-scale hospitals because the hospital is the small hospital which 95 per cent of its patients are local people.

Moreover, the hospital will fully-year benefit from the increasing prices of some medical suppliers and services since the fourth quarter last year and the increased revenue from the opening of cancer centre which was operated since the second quarter in 2008.

Thai Nakarin plans to open neuro centre in the second half of this year which it could boost the hospital's revenue growth.

Ayudhya Securities forecasts Thai Nakarin's revenue in its 2009 this year (ended July 2009) to grow by 9.5 per cent from last year, lower than the hospital's projection of 14-15 per cent. The broker also predicts the hospital to post net profit of Bt145 million, an increase of 13 per cent from last year, higher than the hospital sector's average which is expected to decline by 1.5 per cent.

Thai Nakarin is also expected to have return on equity at 33 per cent during 2009-2010, the highest figure in the hospital's sector.

Thai Nakarin booked net profit of Bt95.608 million in the first six months of the fiscal year 2009 (ended January), rising by 83.69 per cent from the same period last year. The hospital's net profit in the first half of its fiscal year accounted for 66 per cent of Ayudhya Securities' full-year forecast.