The share price of Bangkok Chain Hospital Public Company Limited (BCH) gained 5.21% higher, or ฿1.25/share to ฿25.25/share at the closing bell on July 16, 2021, with a trading value of 1,525 million baht.
KTBST Securities (KTBST) hold a “BUY” rating on BCH with a new target price of 30.50 baht (25.00 baht earlier) based on DCF. KTBST raised terminal growth rate to 3.5% from 2.5% as 1) an escalation of the COVID-19 outbreak should lend support to BCH’s revenue, particularly from COVID-19 screening test and treatment, and 2) the wellness & healthcare business should trend up given rising health awareness.
KTBST has a positive view of BCH’s guidance. First, the number of COVID-19 screening tests reached 580,000 in 2Q21, higher compared to 128,000 in 1Q21. Last, the hospitel’s utilization rate increased to 80-90%, or 7,500 beds, compared to 40% in May (3,400 beds).
KTBST maintains 2021E net profit forecast at 2.39 billion baht, which represents a +94% increase YoY. There is upside potential to the forecast if 2Q21E net profit comes in line with KTBST’s estimation, which is predicted to soar +248% YoY, +199% QoQ to 969 million baht with revenue from COVID-19 tests/treatment to increase to 80% of total revenue.