April 11, 2012 00:00 By CIMB Securities (Thailand)
Waiting for a showdown OUTPERFORM - Maintained Share price: Bt54.00 Target price: Bt60.00
Bumrungrad Hospital Plc (BH)
A solid earnings outlook and reasonable valuations make BH an attractive takeover target. We believe BGH will continue to increase its stake in BH over the long term. This would eventually trigger a general offer, where BGH is likely to have to offer a hefty premium. M&A will continue to be the theme not only BH but also for the whole healthcare sector over the next couple of years. We raise our target price and valuation from 20x CY13 P/E to 22.6x (one SD above the historical average) to reflect this possibility. Reiterate Outperform.