Shares in Bumrungrad Hospital PLC (a good long term play?)

[bart1000]

I came across a poster just now who had invested in these. Had I even know about them (I don't live in Thailand but plan to be retiring there early soon) i would have snapped up these NOT as as speculation but as a long term health insurance

The logic being that if health care costs rise, so will your shares, so you basically insure yourself agains healthcare costs going forward. Having used Bum many times, I want to be treated there going forward.

I am sure there are many posters with sensible advice on this. The shares have MORE THAN DOUBLED since the OP bought (from 87 to 212 now) so anyone with experience of this can share?

Thanks in advance

[expatbrit]

The shares you are interested may, now , be overpriced.

The PLC is now charging prices which many health insurance companies refuse to meet.

[bart1000]

thanks expat Brit

Have you been following this company for a while?

It now seems to be dipping a bit and does seem to have risen pretty high pretty fast.

However, for a long term Dollar cost averaging investment it seems like a logical play. I have seen too many shares that were deemed "overpriced" fly to new heights that made the 'overpriced' shares looked like bargains 3 years down the line

[AyG]

It's trading on a P/E ratio of 46. How is it going to grow its earnings to justify that high ratio? It's currently a single hospital, not a chain. Its patient charges are already high, and there's a lot of competition, so it can't reasonably hike them massively.

Should you be concerned that the share free float is less than 40%? Who are the major shareholders and are they guaranteed always to act in the best interests of all shareholders?

[bart1000]

Thank Ayg. very informative post. That certainly makes it looks highly unattractive. Admittedly, I only even heard of this stock yesterday so don't have much research time on it, but weren't they going to open branches elsewhere? Phuket? Pattaya? or even, I heard HK or Shenzhen? Has that all gone to the wayside now?

[tolsti]

Phuket is tied up by the Bangkok Hospital Group having bought Phuket International as well. Pattaya may well have room for another though.

[bart1000]

Thanks Tolsti

So can one buy share in the Bangkok Hospital group?

Or is there a Thai Healthcare ETF that one can purchase to hedge against long term health care costs when retiring in Thai?

[tolsti]

No idea chum... Just wanted to let you know that Phuket is full in regards to private hospitals.

[maisodni]

Just be aware - there are multiple different subsidiary Private Companies operating under the "umbrella" of the Public Company. See the attached screenshots.

Cheers!
MS

[AyG]

So can one buy share in the Bangkok Hospital group?

Or is there a Thai Healthcare ETF that one can purchase to hedge against long term health care costs when retiring in Thai?

Yes, you can buy shares in Bangkok Dusit Medical Services plc, the parent company. Info at http://www.set.or.th/set/companyprofile.do?symbol=BDMS&ssoPageId=4&language=en&country=US

Its shares, however, have almost exactly the same less-than-desirable attributes as Bumrungrad's shares (P/E ratio 41.74, free float 47.08%).

No Thai healthcare ETF.

[gamini]

I may have been the person referred to by the OP. I did buy a lot of shares at 87. About a year ago and I sold recently for about 220. They went up even further tto about 240. If you can buy them at about 200 I think it's a good investment. I am going to buy them again at this price. Also15 years ago when I came back to Thailand, I bought the shares about 13. Bt each and later sold them at a huge profit. Tthe reason I bought the shares and will continue to buy the shares is that the hospital seems to always be full and is really a first-class operation with high ethics. Unlike most private hospitals. They don't overcharge. They set a price and keep to. Other private hospitals always seem to add on a lot of extras and grossly overcharge patients. I can confirm one thing that I stayed in the best private hospital in the UK for two weeks, namely the London clinic and it wasn't a patch on Bumrungrad and probably 10 times the cost.

[expatbrit]

I may have been the person referred to by the OP. I did buy a lot of shares at 87. About a year ago and I sold recently for about 220. They went up even further tto about 240. If you can buy them at about 200 I think it's a good investment. I am going to buy them again at this price. Also15 years ago when I came back to Thailand, I bought the shares about 13. Bt each and later sold them at a huge profit. Tthe reason I bought the shares and will continue to buy the shares is that the hospital seems to always be full and is really a first-class operation with high ethics. Unlike most private hospitals. They don't overcharge. They set a price and keep to. Other private hospitals always seem to add on a lot of extras and grossly overcharge patients. I can confirm one thing that I stayed in the best private hospital in the UK for two weeks, namely the London clinic and it wasn't a patch on Bumrungrad and probably 10 times the cost.

Bumrungrad may stick to agreed prices for elective procedures but watch the price rise if/when all does not go to plan !

Bumrugrad is now . by far , the most expensive of all the Private hospitals and many health insurers refuse to meet 100% of their charges.

To remain competitive they will have to lower prices or increase their share of the Middle East market !

[bart1000]

It's a funny thing. It's a bit like Starbucks. Their principle stock in trade is coffee and snacks. Anyone can do that right? Take a look at the share performance. BMG seems to be known the world over. Perhaps it has the 'brand' quality that sets it apart (perhaps unreasonably a la starbucks) from other healthcare providers locally.

I have to admit that on a recent medical overhaul, I did feel like a sausage on a conveyor belt, jostling with Arabs. And the service counter in that department were testy to say the least.

That being said, I am not looking to make money, but think about covering health care costs long term.

Gamini, you said you bought these shares at 13 baht 15 years ago? That's a 15 bagger. Phenomenal investment.

[wordchild]

I may have been the person referred to by the OP. I did buy a lot of shares at 87. About a year ago and I sold recently for about 220. They went up even further tto about 240. If you can buy them at about 200 I think it's a good investment. I am going to buy them again at this price. Also15 years ago when I came back to Thailand, I bought the shares about 13. Bt each and later sold them at a huge profit. Tthe reason I bought the shares and will continue to buy the shares is that the hospital seems to always be full and is really a first-class operation with high ethics. Unlike most private hospitals. They don't overcharge. They set a price and keep to. Other private hospitals always seem to add on a lot of extras and grossly overcharge patients. I can confirm one thing that I stayed in the best private hospital in the UK for two weeks, namely the London clinic and it wasn't a patch on Bumrungrad and probably 10 times the cost.

effectively they went bust 98/99 during the Asian crisis. The balance sheet was restructured, after that, with a chunk of the debt being converted to equity, the largest shareholders then became the banks and others who held that debt; as i recall Bangkok Bank was the largest shareholder for a while. Since then they have maintained a very strong balance sheet (they have no net debt) but i would agree with some of the other comments above, a 4 billion plus (US dollar) market value for a single site hospital looks a bit rich to me!

Edited December 7, 2015 by wordchild

[Heng]

Just be aware - there are multiple different subsidiary Private Companies operating under the "umbrella" of the Public Company. See the attached screenshots.

Cheers!

MS

Always a risk anywhere but more so in Asia, especially with overseas Chinese held companies such as these. There could be a subsidiary speculating in coal in Indonesia so your risk isn't just the future of the Bangkok metro healthcare market but it's also subject to world coal prices.

:-)