“Medicine Price Control” Cripples Hospital’s Profit, 12% of LPH’s Profit Disappears

On January 9, 2019, the Central Committee on Prices of Goods and Services Price had approved a price control policy on medical supplies, services, and drugs which caused hospital stocks to face a huge and sudden selloff from investors.

BDMS closed at ฿22.70/share, plunged ฿2 or 8.10% with ฿6 billion in value.
BH closed at ฿176.00/share, sank ฿16.50 or 8.57% with ฿1 billion in value.
BCH closed at ฿15.80/share, fell ฿0.60 or 3.66% with ฿646 million in value.
CHG closed at ฿1.85/share, downed ฿0.06 or 3.14% with ฿206 million in value.
LPH closed at ฿5.55/share, skidded ฿0.05 or 0.89% with ฿4.6 million in value.
THG closed at ฿32.75/share, slid ฿0.25 or 0.76% with ฿69 million in value.
VIBHA closed at ฿1.99/share lost ฿0.03 or 1.49% with ฿5 million in value.

 

Nomura Securities has forecasted that hospital stocks will lose 5-12% of its profit when the price control policy comes into action.

Bangkok Dusit Medical Services Public Company Limited (BDMS)
BDMS has 2019F revenue at ฿83.2 billion. The hospital earns approximately 27-30% of its revenue from medicine, 21-23% from doctor fee, 10-15% from lab & medical supply, and 32-42% from operation cost. While BDMS’s 2019F net profit is ฿11.1 billion, the impact from price control policy would plunge 9% of its profit by estimation.

Bumrungrad Hospital Public Company Limited (BH)
BH has 2019F revenue at ฿19.6 billion. The hospital earns approximately 25-30% of its revenue from medicine, 22-25% from doctor fee, 13-15% from lab & medical supply, and 30-40% from operation cost. While BH’s 2019F net profit is ฿4.46 billion, the impact from price control policy would plunge 5% of its profit by estimation.

Bangkok Chain Hospital Public Company Limited (BCH)
BCH has 2019F revenue at ฿9.21 billion. The hospital earns approximately 15-20% of its revenue from medicine, 20-22% from doctor fee, 10-15% from lab & medical supply, and 43-55% from operation cost. While BCH’s 2019F net profit is ฿1.29 billion, the impact from price control policy would plunge 6% of its profit by estimation.

Chularat Hospital Public Company Limited (CHG)
CHG has 2019F revenue at ฿4.83 billion. The hospital earns approximately 15-20% of its revenue from medicine, 20-22% from doctor fee, 10-15% from lab & medical supply, and 43-55% from operation cost. While CHG’s 2019F net profit is ฿758 million, the impact from price control policy would plunge 5% of its profit by estimation.

Ladprao General Hospital Public Company Limited (LPH)
LPH has 2019F revenue at ฿1.76 billion. The hospital earns approximately 20-25% of its revenue from medicine, 20-22% from doctor fee, 10-15% from lab & medical supply, and 38-50% from operation cost. While LPH’s 2019F net profit is ฿145 million, the impact from price control policy would plunge 12% of its profit by estimation.

Thonburi Healthcare Group Public Company Limited (THG)
THG has 2019F revenue at ฿8.29 billion. The hospital earns approximately 20-23% of its revenue from medicine, 20-22% from doctor fee, 10-15% from lab & medical supply, and 40-50% from operation cost. While THG’s 2019F net profit is ฿734 million, the impact from price control policy would plunge 10% of its profit by estimation.

Vibhavadi Medical Center Public Company Limited (VIBHA)
VIBHA has 2019F revenue at ฿7.05 billion. The hospital earns approximately 25-30% of its revenue from medicine, 20-23% from doctor fee, 10-15% from lab & medical supply, and 32.45% from operation cost. While VIBHA ’s 2019F net profit is ฿973 million, the impact from price control policy would plunge 9% of its profit by estimation.