Estimating Value

[Lil_Jon]

Hi Guys , i am thinking of buying some shares of bumrungrad hospital , as the medical tourism in S E ASIA is really flourishing, when i did my valuations i came out with a price of 31 baht per share , what do you think about it , is it too unrealistic valuation , i know it is growing earning at around 40% , so any investing gurus out there , what would be a realistic value for shares of bumrungrad hospital

[jbaldwin]

Given that Bunrungrad Hospital closed on Friday at 40.5. I am not sure why you are thinking about buying if your valuation is 31.

13 Thai Stockbrokers cover BH. The target values are in the range of 30-59.88 with a median of 47. Hence, your valuation conservative compared with analysts view.

However, Kim Eng and Far East Securities both issued revised profit forecasts on 18 December and both forcast that 2008 profits will be sharply lower than 2007 (Kim Eng 2008 - 1,315m v 2007 - 1,907m and FES 2008 - 1,320m v 2007 1,952m). I have not seen the reports so cannot say if there are one off iems to explain the forecast fall. However your comment that earning aregrowing at 40% should more acculated by that earning had been growing by 40%.

I have never looked at this company in any detail. However, my initial view would be that it is a well run, strongly growing business with a share price which seems to more or less properly reflect the growth prospects. I would think you can find better value elsewhere.