A patient is pushed through a corridor at Bangkok Hospital in Bangkok,Thailand. Bangkok Dusit Medical Services, the company with the highest trading volume among its peers, showed a one-year return of 42.46% as of November 21 and even pays a dividend that currently yields 1.11%.
By Arno Maierbrugger
Political unrest and the subsequent military coup in Thailand this year have certainly put pressure on the country’s economy, but one sector – despite a few temporary setbacks – has shown remarkable resilience so far: Medical tourism to the kingdom and with it the private healthcare industry.
While in May shortly after the coup d’etat – in the wake of sliding tourism arrivals – the hospital sector was also hit and reported temporarily dropping foreign patient inflow, it has since shown a remarkable recovery.
Numbers of international patients, among them a large part from the Middle East, have picked up again. Leading private hospitals catering to foreign patients have announced plans to expand their services and open another bunch of referral offices abroad.
Bangkok Dusit Medical Services, owner of the Bangkok Hospital chain popular with foreigners, said it will spend $130mn over the coming three years to build four more hospitals of which one will mainly be catering to Middle East patients. Bumrungrad Hospital in Bangkok,
Southeast Asia’s largest private medical center, said it aims to raise revenue by more than 10% in 2015 due to increasing numbers of patients, among them many from the “core markets” in the Middle East.
Overall, Thailand welcomed some 1.8mn medical tourists (together with those who just came for spa and wellness services the number sums up to 2.5mn) from overseas in 2013, earning around $4.7bn in the period.
It is a continuation of the average growth of 15% a year over the past decade. The forecast for this year is a bit more conservative, but in 2015 the sector is expected to return to the usual growth rate after “a small hiccup in the short term”, as Chatree Duangnet, CEO of Bangkok Dusit Medical Services, puts it, referring to the military coup.
Indeed, while the country is still under martial law, everyday hospital life is not affected. The flashy lounges of both Bangkok Hospital and Bumrungrad are teeming with patients, as an on-site inspection last week showed, and an estimated 40% are seemingly Middle Easterners judged by their clothing and Arabic language they converse.
The obviously-regained buoyancy of the medical business makes a look at the stock price development of private Thai hospital groups worthwhile, of which 15 are listed at the Stock Exchange of Thailand.
Bloomberg data shows that they made an average jump of a whopping 54% year-to-date, probably enough for many patients to recover their medical expenses would they have added some of the best performing companies to their stock portfolio.
Bangkok Dusit Medical Services PCL, the company with the highest trading volume among its peers, showed a one-year return of 42.46% as of November 21 and even pays a dividend that currently yields 1.11%. Bumrungrad Hospital PCL’s shares climbed 51.67% in the same period, and the current dividend yield stands at 1.4%. Samitivej PCL, another big healthcare group, saw its shares advance 66.18% over the past 12 months and pays out dividends that currently yield a respectable 3.4%.
The latest addition to Bangkok’s listed hospital groups, Srivichai Vejvivat PCL, which operates three hospitals in the country and went public in 2012, shows a skyrocketing 141.69% advance over the past year.
Local analysts say that hospital stocks remain their top picks even after this rally, adding positive sentiment to further growth expectations of the entire Thai healthcare industry.
