20140530-Maybank_KERPL-Positive_outlook_but_rich_valuation_12页_712kb

报告摘要

The company maintains a HOLD recommendation due to a rich valuation and narrow potential upside.
A positive outlook is maintained, but the valuation is not compelling.
Sanamchan Hospital was acquired for almost THB3.7b, broadening geographic coverage and creating synergies through diversification, network expansion, and resource sharing.
The acquisition implies a 26x PER, in-line with historical averages, and is expected to contribute 2.5% to earnings forecasts.

BGH aims to expand its hospital network from 31 to 50 hospitals by 2015, including 9 greenfield hospitals and 7 acquisitions.
This expansion adds 555 structured beds, representing a 7.9% increase in capacity.
The company is focused on cost containment and maintaining EBITDA margin at 23%.

Political turmoil in 1Q14 led to a drop in revenue per admission by 4% YoY due to fewer international patients.
However, provincial hospitals offset this weakness, contributing to 8% growth in OPD and 17% growth in IPD.
The company expects volume and prices to return to normal levels in 2H14.

The DCF-based target price is THB16, implying 36x FY14F PER, 5.5x FY14F PBV, and 2.9x FY14F PEG.
BGH's share price has increased 40% YTD, outperforming the SET index by 31%, Asia Pacific Health Care Service peers by 25%, and global peers by 18%.
The stock trades at 36x FY14F PER, which is 16% and 21% higher than Thai and global peers, respectively.
Despite strong earnings growth and potential M&A activity, the valuation is not compelling and has limited upside.

EBITDA margin guidance is 22% - 23%, with EBITDA growth adjusted upward by 2-12%.
Net profit is upgraded from 6,816m to 6,961m for FY14F, and from 7,717m to 8,265m for FY15F, and from 8,950m to 10,024m for FY16F.
Occupancy rate is increased from 71% to 73% in 2015F and from 72% to 75% in 2016F.

Net debt/equity is expected to decrease from 43.3% to 38.3% in FY14E, and further to 25.9% and 20.2% in FY15E and FY16E.
Net debt/EBITDA is projected to drop from 1.8x to 1.5x in FY14E and further to 1.2x in FY16E.
The company maintains a low leverage ratio and expects to manage its financial position effectively.

BGH's PER is 36.1x in FY14F, with a premium of 15.8% over regional peers.
PBV is 5.5x, with a premium of -2.3%.
EV/EBITDA is 22.4x, with a premium of 21.3%.
The company's dividend yield is 1.3% in FY14F and 1.5% in FY15F, which is lower than regional peers.

Revenue Growth: 25.8% in FY12A, 11.0% in FY13A, and 11.2% in FY14E.
EBITDA Growth: 24.5% in FY12A, 1.5% in FY13A, and 11.9% in FY14E.
EBIT Growth: 31.6% in FY12A, -1.7% in FY13A, and 12.0% in FY14E.
Pretax Profit Growth: 60.7% in FY12A, -19.0% in FY13A, and 11.2% in FY14E.
Core Net Profit Growth: 79.0% in FY12A, -20.2% in FY13A, and 11.2% in FY14E.

Positive outlook: The company has a strong long-term growth profile and expansion plans.
Acquisition of Sanamchan Hospital: A key strategic move to expand geographic coverage and create synergies.
Earnings upgrade: Reflects improved performance and potential from new hospitals and cost control.
Valuation concerns: Despite positive fundamentals, the current valuation is not compelling and limits upside potential.
Political uncertainty: Affects short-term performance but is expected to resolve by 2H14.
Financial health: The company maintains a low leverage ratio and effective cost management.

展开完整摘要