Hospital Stocks Edge Higher, Analysts Forecast Bullish Revenue in 2Q21 from Covid-19

The Health Care Services Index (HELTH) climbed 0.45% or 24.59 points to 5,543.65 points in the morning session on Monday, June 28, led by Chiang Mai Ram Medical Business (CMR). The share price rose ฿0.18/share or 6.98% to ฿2.76/share with a trading value of 40 million baht.

Followed by Bangkok Chain Hospital (BCH). The share price rose ฿1.40/share or 6.42% to ฿23.20/share with a trading value of 1,154 million baht.

Wattanapat Hospital Trang (WPH) rose ฿0.12/share or 5.94% to ฿2.14/share with a trading value of 6 million baht.

Chularat Hospital (CHG) rose ฿0.20/share or 5.35% to ฿3.94/share with a trading value of 1,106 million baht.

Rajthanee Hospital (RJH) rose ฿1.25/share or 4.07% to ฿32.00/share with a trading value of 26 million baht.

Capital Nomura Securities (CNS) is bullish on the Thai Health Care Services sector, forecasting that four of the five stocks in it coverage, including BDMS, BCH, CHG, and THG (excluding BH) will gain extra benefits from Covid-19 and that revenue for the majority of these stocks will grow both YoY and QoQ in 2Q21. Initially, 42% of total BCH revenue is expected to come from Covid-19 services in 2Q21, while CHG, BDMS, and THG are predicted to grow revenue by 17%, 15%, and 12%, respectively, thanks to Covid-19.

CNS set a target price of 27 baht per share on BDMS and upgraded it to a Top Healthcare Pick. As a result of the ongoing vaccination campaign, CNS believes that BDMS and BH, as well as THG with an upside from alternative vaccine services income, would revive in FY22 and FY22.

In the short term, there is still a slight negative for the Healthcare sector, particularly for hospitals that halt Covid-19 testing services, as this could result in revenue declines in 3Q21.