BCH-CHG Gain over 2%, Analysts Forecast Positive 3Q Earnings Outlook Driven by Covid-19

Speculation about 3Q21 earnings drove BCH and CHG up more than 2% on Wednesday. Analysts rated both stocks as top picks in the hospital sector, citing the severe Covid-19 outbreak.

As of 14:30 local time in Thailand, the share price of Chularat Hospital Public Company Limited (CHG) rose ฿0.12/share or 3.21% to ฿3.86/share, with a trading value of 473 million baht.

The share price of Bangkok Chain Hospital Public Company Limited (BCH) rose ฿0.60/share or 2.94% to ฿21.00/share, with a trading value of 407 million baht.

Tisco Securities (TISCO) and Asia Wealth Securities (AWS) have recommended a “BUY” rating on CHG and BCH on their positive 3Q21 earnings outlook.          

Meanwhile, Krungsri Securities (KSS) expects CHG’s earnings to surge 278% YoY and 85% QoQ to a new high of 1.1 billion baht in 3Q as the latest Covid-19 clusters are close to several of the group’s hospitals. This would push up revenue from Covid services, suggesting upside risk to KSS and market earnings forecasts for FY21, recommending “BUY” with a target price of 4.50 baht.

An estimated new high earnings in 3Q21 will be driven by revenue from Covid services.  This would take 9M21 profit to 1.9 billion baht (+204% YoY) and beat KSS and  consensus FY21 forecast earnings. CHG will release results on 12 Nov.

KSS estimates Covid services revenue would surge 178% QoQ to 2.2 billion baht in 3Q. Average daily Covid patients (in cohort and hospitel rooms) have jumped to 4,000-5,000 from 1,000+ in 2Q. This would more than offset lower revenues from: (i) Covid tests-number of tests conducted only inched-up 2% to 92,000 and price for an RT-PCR test has been reduced by 26% to 1,700 baht under NHSO effective 1 Aug, and (ii) non-Covid patients –revenue is estimated to drop 10% YoY (flat QoQ) to 1.3 billion baht. KSS expects stable revenues (QoQ) from ASQ services (50 million baht), cardiology center at Sirindhorn Hospital (15 million baht),and management of Pattaya City Hospital and Koh Lan medical unit (60 million baht).