RJH Jumps 4%, Analyst Affirms a Solid Earnings in 1Q21, Recomm. “BUY” with a TP at ฿30

The share price of Rajthanee Hospital Public Company Limited (RJH) rose ฿1.00/share or 3.74% to ฿27.75/share as of 11:39 local time in Thailand, with a trading value of 38 million baht. 

 

DBS Vickers Securities (DBSVS) has given a “BUY” recommendation on RJH with a target price of ฿30.00/share which is pegged to 2021EP/E of 19.3x, compared to its 5-year average at 22.4x. DBSVS foresaw a strong financial position on RJH due to a high ROE of 27.4% as of the end of 2020, compared to the group average of 16.3%.

 

DBSVS saw RJH is still on a stable growth path in 1Q21 despite being affected by the new wave of Covid-19 pandemic. RJH would book a gain of 40 million baht from Covid-19 test in 1Q, as well as a 25 million baht revenue from high cost care. Therefore, RJH is expected to have a net profit of 80-90 million baht for this quarter.  

 

For 2021 earnings outlook, according to RJH’s management guidance, the company expected revenue from non-sw (excluding Covid-19 test) and social security sector to grow 15% YoY and 10% YoY, respectively. EBITDA margin is estimated at 30-31%. Meanwhile, revenue from Covid-19 test is projected to decrease YoY to 65 million baht. DBSVS targeted RJH’s 2021 earnings of 403 million baht, an increase of 9% YoY.