BDMS - 3Q24: Record high core profit, as expected.

BDMS reported 3Q24 core profit of Bt4.2bn, up 9% YoY and 27% QoQ, reaching a record high and in line with INVX and market estimates. Driving growth was higher revenue, especially for international patient services, and a wider EBTIDA margin. We expect 4Q24 core earnings to continue to grow YoY (but be flat QoQ) on rising healthcare demand. BDMS is our top pick in the Healthcare Service sector and we rate it as Outperform with an end-2025 DCF TP of Bt36/share.

3Q24: Record high core profit, as expected. BDMS reported 3Q24 core profit of Bt4.2bn, up 9% YoY and 27% QoQ, reaching a record high and in-line with INVX and market estimates. Driving growth was higher revenue growth, especially for international patient services, and wider EBTIDA margin.

Highlights:

• 3Q24 revenue was Bt27.1bn, up 6% YoY and 10% QoQ. By nationality, international patient services (26% of revenue) grew more strongly at 8% YoY and 7% QoQ driven by patients from Qatar (+47% YoY), China (+32% YoY) and UAE (+29% YoY). Thai patient services (74% of revenue) grew 6% YoY and 11% QoQ. By location, revenue from hospitals outside Bangkok grew 10% YoY, beating Bangkok’s 4% YoY, to contribute 46% of total hospital revenue.
• EBITDA was at 25.2% in 3Q24, up from 24.9% in 3Q23 and 22.3% in 2Q24, driven by higher bed utilization rate at 77% in 3Q24, up from 76% in 3Q23 and 62% in 2Q24.

Earnings forecast maintained. 9M24 results accounted for 72% of our full-year forecast and we leave our projection unchanged. We expect core earnings to continue to grow YoY, backed by rising healthcare demand, but be flat QoQ. We will provide more details after the November 19 analyst meeting. We roll valuation to end-2025 (from end-2024); this changes our DCF TP insignificantly and it stays at Bt36/share (WACC at 7.1% and LT growth at 3%).

Risks. We are keeping an eye on the global economic slowdown and geopolitical risk that may cause clients to delay elective medical care and make it inconvenient for international patients to come to Thailand for treatment. However, we see this risk as diluted by BDMS’ large revenue base from Thai patients and its diversified portfolio of international patient services. We see ESG risk as patient safety (S): BDMS has adopted a variety of quality assurance systems to provide continuous patient care.