Download OUTPERFORM Chularat Hospital

COMPANY RESEARCH | Company Update
OUTPERFORM
September 24, 2015
Chularat Hospital
(CHG TB)
Share Price: Bt2.14
Target Price: Bt2.40 (+12%)
Savvy doctor in high margin suburbs
Revenue from social welfare has minimal risk, while revenue
from cash patients has growth potential
Expansion projects to boost earnings by 25% in 2015F, 22% in
2016F and 23% in 2017F
OUTPERFORM with DCF-based TP of Bt2.4/sh, implying 32x
FY16 and 26x FY17 P/E. The only hospital to focus on growing
population in industrial estate areas
Revenue grows towards cash patients, while margins set to expand
CHG operates six hospitals and seven clinics with 376 available
beds. All hospitals are located close to industrial estates. CHG is the
first private hospital to join the Social Security (SS) program.
Revenue from SS accounted for 38% of total revenue in 1H15, but
payment risk is minimal as the SS Office pays a fixed amount plus a
premium for more complex treatments. However, cash patients (avg
Bt1,363/visit OPD, Bt17,754/visit IPD) yield a higher margin than SS
patients (avg Bt993/visit). CHG is therefore focusing on cash
patients by increasing single beds and improving service quality. We
forecast cash patient revenue contribution will increase from 50% in
1H15 to 54% in 2017F, and net profit margin will improve from
18.0% in 2014 to 19.2% in 2017F.
Highest earnings growth in the sector
CHG plans to increase capacity at its three main hospitals, CHG 3,
CHG 9 and CHG 11. Expansion of CHG 11 is scheduled for
completion in 4Q15 and for CHG 3 and 9 in 1H16. This will increase
OPD rooms by 45% to 138 rooms and IPD beds by 38% to 518
beds. As the utilization rate of CHG’s hospitals of 82% exceeds the
normal utilization rate at 70%, we expect patient volume growth of
9% in 2015F, 13% in 2016F and 12% in 2017F. This will lead to 23%
earnings CAGR in 2014-2017F, the highest in the healthcare sector.
OUTPERFORM with Bt2.4 DCF-based TP
We have an OUTPERFORM rating with a 2016F DCF-based TP of
Bt2.4/sh, implying 32x P/E FY16, relatively in line with 31x P/E FY16
of regional peers. Its well-balanced source of revenue and strong
earnings growth makes CHG more attractive than peers. CHG has
financial rooms for new acquisitions due to its strong balance sheet
with a low D/E ratio of only 0.2x, the lowest in the sector.
Financial Summary (Btm)
Year to Dec
Sales (Btm)
Growth (%)
EBITDA (Btm)
Growth (%)
Recurring profit (Btm)
Growth (%)
FDEPS (Bt)
Growth (%)
PE (x)
DPS (Bt)
Yield (%)
BVPS (Bt)
P/BV (x)
Krungsri Securities Research Team
Naphat CHANTARASEREKUL
662 - 659 7000 ext 5000
[email protected]
Teerapol UDOMVEJ
Assistant analyst
Key Data
12-mth High/Low (Bt)
2.32 / 1.64
Market capital (Btm/US$m)
23,540 / 658.90
3m avg Turnover (Btm/US$m)
80.16 / 2.24
Free Float (%)
32.34
Issue Shares (m shares)
11,000
Major shareholders:
- BBL ASSET MANAGEMENT
21.57
- PLUSSIND KANNIKAR
18.13
- PANYAPHOL APIRUM
10.25
Share Price Performance
YTD
1Mth
3Mth 12Mth
Absolute (%)
18.9
18.9
18.2
19.6
Relative to index (%)
29.5
12.5
30.5
38.4
Krungsri Securities vs Market
2013
2014
2015F
2016F
2017F
2,221
19
611
15
414
24
0.04
(1)
56.8
0.03
1.3
0.24
8.9
2,672
20
716
17
481
16
0.04
16
49.0
0.03
1.4
0.25
8.4
3,223
21
871
22
601
25
0.05
25
39.2
0.03
1.3
0.28
7.8
3,903
21
1,062
22
732
22
0.07
22
32.1
0.03
1.6
0.31
6.8
4,695
20
1,282
21
903
23
0.08
23
26.1
0.04
1.9
0.36
5.9
Market Recommend
Positive
Neutral
5
6
Negative
0
Krungsri
Consensus
% +/-
Target Price (Bt)
2.4
2.2
9.1
’15 Net Profit
601
574
4.7
675
8.4
’16 Net Profit
732
Source: Bloomberg, Krungsri Securities
Disclaimer: This publication constitutes information disclosed to the public and believed to be reliable but its accuracy and completeness are not guaranteed. All opinions,
suggestions, or projections are for informational purposes only and shall not be construed as an inducement for the sale or purchase of securities. Amendments to this
publication may be made without prior notice. Investors are urged to exercise caution in making a decision to invest in any securities.
1
Company Update | CHG
September 24, 2015
Impressive earnings growth
We resume our coverage of CHG with an OUTPERFORM rating and a
DCF-based TP of Bt2.4/sh. We like CHG because:
1) CHG has hospitals and clinics located close to a major industrial
zone and Suvarnabhumi airport, which are areas of high population
and steady expansion.
2) All of CHG's hospitals are located in highly populated areas where
demand for healthcare is high. This is reflected by a high bed
utilization rate of 82% in 2014, higher than BH (70%) and BDMS
(67%).
3) CHG’s revenue is well balanced between general patients (50%)
and social welfare patients (50%).
4) CHG has a competitive advantage to other hospitals in the same
area thanks to its specialized medical services such as hand
microsurgery center, newborn ICU center, stroke center, heart
center, prostate cancer center and skin center.
5) CHG has a strong balance sheet with a D/E ratio of only 0.2x, which
will enable it to make some M&As.
6) CHG will benefit from the upcoming AEC as CHG 3 and CHG 9 are
located near Suvarnabhumi airport. In addition, a planned hospital,
Chularat 304 International (CHG 304), and CHG Rong Kluea clinic
are located near the Thai-Cambodia border.
We expect CHG’s earnings to grow by 25% in 2015F, 22% in 2016F and
23% in 2017F. Our growth estimates are based on expected completion of
expansion projects of CHG 3, CHG 9, and CHG 11 in 2015-2016. The
utilization rate of the three hospitals is more than 80%, higher than the
normal utilization rate of 70%. We therefore expect significant patient
volume growth of 13% in 2016F and 12% in 2017F. Furthermore, CHG has
had a proven track record of raising revenue per patient by a 9% CAGR
over the past five years thanks to annual price adjustments and the
addition of more specialized treatments, resulting in higher revenue
intensity. We believe this momentum will continue in 2015-2017F.
After the three main hospitals compete expansion, CHG’s EBITDA margin
will widen slightly from 26.8% in 2014 to 27.3% in 2017F due to economies
of scale in terms of sharing of doctors, medical equipment, medicine and
IT software, which will lead to lower COGS and SG&A.
CHG margins
40.0%
35.0%
30.0%
25.0%
35.7%
34.9%
34.3%
34.9%
35.1%
35.7%
36.3%
28.4%
27.5%
26.8%
27.0%
27.2%
27.3%
27.3%
18.0%
18.7%
18.0%
18.6%
18.8%
19.2%
19.9%
2012
2013
2014
2015F 2016F 2017F 2018F
30.6%
27.8%
23.6%
20.6%
20.0%
15.0%
10.0%
5.0%
12.1%
9.7%
0.0%
2010
2011
Gross Profit Margin
EBITDA Margin
Net Profit Margin
Source: Company data, Krungsri Securities
Krungsri Securities Research
2
Company Update | CHG
September 24, 2015
Five expansion projects (four under construction)
CHG owns and operates six hospitals and seven clinics with 93 diagnostic
rooms (OPD rooms), and 414 registered IPD beds (376 available beds).
The company has a 16% market share of private hospitals in terms of
available beds in Samut Prakarn and Chachoengsao provinces.
Five expansion projects will be long-term growth drivers. Three main
hospitals will be expanded, CHG 3, CHG 9 and CHG 11. Expansion of
CHG 11 is expected to be completed in 4Q15 and CHG 3 and CHG 9 in
1H16. This will increase OPD rooms from 95 to 138 (+45%) and IPD beds
from 376 to 518 (+38%).
CHG is currently renovating and expanding Cholvaej Hospital, which CHG
acquired in 2014 for Bt57m. It is a small hospital with three OPD rooms
and 11 IPD beds. The plan is to increase the number of OPD rooms to five
(+67%) and IPD beds to 59 (+436%). Expansion is scheduled for
completion in 2017. This acquisition was aimed at raising IPD capacity
The last expansion project will be a new greenfield hospital, Chularat 304
International (CHG 304) located in Prachinburi province, near 304
industrial estate, Rojana Industrial Park, Kabinburi Industrial Zone and
Sahapat Group Industrial Estate. The hospital will have 20 OPD rooms and
150 IPD beds, and is scheduled for completion in 2017. CHG did not
disclose details of this project, and so we have not yet factored this into our
model.
All five projects a require capex of Bt1.7bn. We estimate CHG will
generate EBITDA of Bt0.9-1.3bn pa in 2015-2017F, which will be sufficient
for the investment. Completion of all projects will result in CHG’s OPD
capacity increasing by 66% from 95 rooms to 158 and IPD capacity rising
by 90% from 376 IBD beds to 716. We view this as a long-term growth
driver.
Branch
Type
Year
Established
OPD -Rooms
Existing
Expansion
IPD - Available Beds
Total
Existing
Expansion
Investment
(Bt m)
Total
Expansion
period
Chularat Hospital PLC - Area coverage : Theparak road, Bang Na road, Samut Prakarn Province
CHG 1
Hospital
1986
5
5
19
CHG 2
Clinic
1990
3
3
0
CHG 3
Hospital
1991
28
40
134
CHG 4
Clinic
1993
3
3
0
0
CHG 5
Hospital
1994
5
5
26
26
12
19
0
55
189
300
2013-2015
Convenience Hospital Co.,Ltd. - Area coverage : Kingkaew road, Eastern Bangkok, Suvanabhum Airport
CHG 7
Clinic
1993
1
1
0
0
CHG 8
Clinic
1993
2
2
0
0
CHG 9
Hospital
1993
25
39
100
14
39
139
350
2014-2015
48
134
300
2012-2014
200
2014-2017
2013-2017
Bang PakongVejchakijCo.,Ltd. - Area coverage : Bang Na road, Chachoengsao province
CHG 11
Hospital
1994
16
CHG 12
Clinic
2012
2
Cholvaej
Hospital
2014
3
CHG Rong Kluea
Clinic
2015
0
17
2
33
86
2
0
5
11
0
0
0
48
59
0
Chularat Arkanay Co.,Ltd. - Area coverage : Prachinburi province
Chularat304 Inter
2
18
20
0
150
150
575
Total
95
Source: Company data, Krungsri Securities estimates
Clinic
63
158
376
340
716
1,725
Krungsri Securities Research
2014
3
Company Update | CHG
September 24, 2015
CHG’s service area
Source: Company data
Expansion project of CHG 3
Expansion project of CHG 9
Source: Company data
Source: Company data
Expansion project of CHG 11
Expansion Cholvaej Hospital
Source: Company data
Source: Company data
Krungsri Securities Research
4
Company Update | CHG
September 24, 2015
Well-balanced revenue
We like CHG’s business model as revenues are well balanced between Aclass patients and social welfare patients. A-class patients contribute 50%
of total revenue in 1H15 and social welfare patients 50%. A-class patients
consist of self-pay patients, corporate contract and insurance clients,
persons covered under the Protection for Motor Vehicle Victims Act and
Workers Compensation Fund. The majority of social welfare patient
revenue is derived from persons with Social Security coverage and the
remainder from patients under the National Health Security scheme.
Revenue from social welfare is secure as the Social Security Office pays
fixed payments to CHG based on the number of registered SS members.
We see potential growth in revenue from A-class patients due to CHG’s
expansion plans. We forecast A-class revenue contribution will reach 54%
of total revenue in 2018F and 60% in 2022F.
Source: Company data
Health Care Service System in Thailand
Revenue Breakdown
100%
1%
1%
1%
7%
8%
12%
13%
14%
42%
41%
38%
36%
34%
29%
28%
27%
28%
28%
90%
80%
42%
41%
44%
70%
60%
50%
40%
32%
33%
31%
24%
26%
24%
22%
23%
23%
23%
24%
2010
2011
2012
2013
2014
2015F
2016F
2017F
SS
NHS
30%
20%
10%
0%
A-Class IPD
A-Class OPD
Source: Company data, Krungsri Securities
Krungsri Securities Research
Source: Company data
5
Company Update | CHG
September 24, 2015
IPD: Utilization rate
OPD: Utilization rate
(Rooms)
(%)
(Beds)
200
90%
800
80%
750
78%
180
75%
73%
71%
69%
71%
61%
160
60%
136
140
64%
138
123
93
80
63
79
71
700
60%
650
50%
600
40%
120
100
70%
30%
97
84
20%
10%
0%
60
2010
2011
2012
2013
2014
OPD Room (LHS)
2015F 2016F 2017F 2018F
Utilization rate (RHS)
Source: Company data, Krungsri Securities
550
(%)
90%
85%
84%
82%
79%
72%
82%
85%
80%
76%
566
518
72%
500
75%
471
70%
450
400
350
80%
334
341
341
2010
2011
2012
363
376
2013
2014
390
65%
60%
300
IPD Beds (LHS)
2015F 2016F 2017F 2018F
Utilization rate (RHS)
Source: Company data
Social Security program ensures payment
CHG was the first private hospital to join the Social Security (SS) program
in 1992, and thus it has strong knowledge in managing the program. This
is evident from its ability to grow SS revenue by a 20% CAGR over the
past five years. The growth was driven by a registered SS member growth
CAGR of 7% and revenue per head growth CAGR of 13%. There were
347,642 SS members registered with CHG as of August this year, which
accounted for 3% of total SS members in Thailand. We forecast registered
SS members to grow by 7% pa in 2015-2018F. Note that CHG’s maximum
capacity of SS is 440,000 members. CHG can request an increase in
quota after its expansion is complete.
In addition, the Social Security Office introduced a new system for SS in
2012, which can improve CHG’s margin. Under the new system, instead of
paying only a fixed payment per registered member (Bt1,460/member/year
and plus Bt40/member/year for HA Level II hospitals and
Bt80/member/year for HA Level III hospitals), SSO pays a premium for
more complex treatments, as follows:
1) Average Bt12,500/treatment for each high intensity case
2) Average Bt432/member/year for hospitals covering chronic
disease treatments (e.g., diabetes, hypertension, stroke). Note that
CHG received more than Bt500/member/year from this
compensation.
Therefore, SS revenue per head increased from Bt2,052 to Bt3,321 (13%
CAGR) in 2010-2014. We conservatively forecast SS revenue per head to
grow by 7% pa in 2015-2018F.
Krungsri Securities Research
6
Company Update | CHG
September 24, 2015
Revenue from Social Security System
Social Security System
(members)
(Bt)
500,000
450,000
3,321
2,852
350,000
300,000
3,956
3,000
398,453
372,386
348,024
326,783
Revenue Structure
= (1) + (2) + (3)
3,500
3,013
308,005
100,000
287,146
150,000
274,399
252,903
200,000
4,500
4,000
2,052 2,095
250,000
4,193
Fixed Payment
Statistics
Medical Services
2,000
Basic Payment (Fixed)
All IPD
1,460 Bt / Head / yr
1,500
HA Level III: + 80 Bt / head / yr
2010 2011 2012 2013 2014 2015F 2016F 2017F 2018F
OPD only 26
Chronic Diseases
OPD
AdjRW < 2
HA Level II: + 40 Bt / head / yr
500
-
IPD
AdjRW ≥ 2
1,000
50,000
Registered SSO member (LHS)
Per Special
2,500
426,344
400,000
3,521
3,732
(10%)
(90%)
12,500 Bt/RW (avg.)
Average: Nationwide
15,000 Bt/RW (max.)
432 Bt / head / yr
SSS Revenue per head (RHS)
Source: Company data, Krungsri Securities
Source: Company data, Krungsri Securities
Focus on A-class patients to improve margins
CHG’s strategy for the next three years is to increase A-class patients
since these yield higher margins than SS patients. In the past five years,
CHG’s A-class OPD patient volume increased by a 7% CAGR and IPD
volume by 10% thanks to an increase in specialized medical services, e.g.
beauty center and Chinese medicine. We forecast A-class OPD/IPD
patients to grow at a CAGR of 11% in 2014-2017F.
In terms of revenue per head, CHG has a proven track record, as shown
by the fact that A-class OPD and IPD revenue per head increased by a 9%
CAGR over the past five years due to annual price adjustments made
possible by providing higher quality medical services. We assume A-class
OPD revenue per head will continue to increase by a 9% CAGR and IPD
revenue per head by a 10% CAGR in 2014-2017F.
Consequently, the proportion between A-class revenue and SS revenue
will change to 54%:46% in 2018 compared to 50%:50% in 1H15.
A-class volume
A-class average daily census (ADC)
(patients)
2,500
(patients)
2,322
400
2,073
1,851
2,000
1,500
1,403
1,130
1,425
1,503
1,638
1,249
1,000
500
64
74
82
86
94
2010
2011
2012
2013
2014
103
116
130
146
0
350
400
300
350
250
300
200
250
150
200
100
150
50
0
Visits per day (OPD) (LHS)
2015F 2016F 2017F 2018F
Admission per day (IPD) (RHS)
Source: Company data, Krungsri Securities
Krungsri Securities Research
(beds)
415
450
373
286
241
247
2010
2011
276
307
333
100
50
0
2012
2013
2014
2015F
2016F
2017F
Average Daily Census
Source: Company data, Krungsri Securities
7
Company Update | CHG
September 24, 2015
A-class revenue per head
ROE (%) (as of 2014)
(Bt)
(Bt)
21,482
2,700
%
22,000
19,529
BCH
20,000
17,754
11.4
18,000
2,200
15,188 15,540
16,000
13,510
1,700
12,781
1,200
700
967
1,011
2010
2011
1,127
1,240
1,371
17.2
14,000
1,760
1,481
BDMS
1,614
12,000
CHG
17.7
10,000
8,000
BH
2012 2013 2014 2015F 2016F 2017F
Revenue per visit (OPD) (LHS)
Revenue per admission (IPD) (RHS)
30.1
3
8
13
18
Source: Company data, Krungsri Securities
Source: Krungsri Securities
Net profit margin (%) (as of 2014)
EBITDA margin (%) (as of 2014)
%
28
33
%
BCH
BDMS
9.8
BDMS
BH
CHG
9
11
13
15
17
27.7
10
19
Source: Krungsri Securities
25.9
BH
18.0
7
25.3
CHG
17.5
5
21.5
BCH
13.2
3
23
15
20
25
30
Source: Krungsri Securities
Valuation
We value CHG using the DCF method for 2016F with a 9.3% discount rate
and 3% nominal terminal growth. We assume a risk-free rate of 4.0%,
market risk premium of 6.0%, and beta of 0.89 to derive our discount rate,
based on projected 1% debt and 99% equity weighting in 2016F. We
assume a gross profit margin of 35% in 2015-2016F and 36% in 2017F.
Our TP of Bt2.4/sh implies 32x P/E FY16, less than 31x P/E FY16 of its
regional peers. CHG deserves to trade at a premium as it is in a growth
stage with the possibility to increase the portion of A-class patients, which
provide a higher yield than SS patients.
BDMS: DCF valuation
Discount rate
Terminal growth
NPV (Btm)
Add: Terminal value (Btm)
Add: Cash (Btm)
Less: debt (Btm)
Add: Investment (Btm)
Less: Minorities (Btm)
Residual ordinary equity (Btm)
No. of shares (million)
Residual ordinary equity /sh (Bt)
9.3%
3.0%
5,958
19,601
1,005
-9
0
4
26,551
11,000
2.4
Source: Krungsri Securities
Krungsri Securities Research
8
Company Update | CHG
September 24, 2015
Key Assumptions
No of beds
SS Volume growth
SS revenue / patients growth
OPD Volume growth
OPD revenue / patient growth
IPD Volume growth
IPD revenue / patient growth
Capex (Btm)
GPM
SG&A/Sale
Source: Krungsri Securities
FY14A
376
FY15F
390
FY16F
471
FY17F
518
FY18F
566
6%
10%
5%
11%
9%
14%
6%
6%
9%
8%
9%
10%
7%
6%
13%
9%
13%
10%
7%
6%
12%
9%
12%
10%
7%
6%
12%
9%
12%
10%
688
550
300
100
100
34%
13%
35%
13%
35%
13%
36%
13%
36%
13%
Company Background
CHG was founded in 1986 to operate a private hospital with registered
capital of Bt1.10bn. CHG owns and operates six hospitals and seven
clinics that cover Suvarnabhumi Airport (eastern Bangkok), along BangnaTrad Road extending to Chachoengsao province, along Highway 304 to
Prachinburi province, and to downtown Chonburi province with a total of
414 registered beds.
CHG has excellent medical units that have been certified by various
institutions, such as the Hand Microsurgery Center, Newborn ICU Center,
Stroke Center, Heart Center, and Cancer Center. CHG always focuses on
quality treatment and specialist teams, which resulted in the hospital
receiving international accreditation from JCI (for Chularat 3 Hospital),
national accreditation from HA (for Chularat 3, Chularat 9, and Chularat
11).
CHG shareholders
CHG structure
Source: Company data, SET
Source: Company data
Krungsri Securities Research
9
Company Update | CHG
September 24, 2015
P/E Band
P/BV Band
(X)
55
(X)
11.0
+3 S.D. = PE 50.8x
50
10.0
+3 S.D. = 9.9x
45
+2 S.D. = PE 44.4x
9.0
+2 S.D. = 8.5x
40
+1 S.D. = PE 37.9x
8.0
L-T Average at 31.5x
5.0
-1 S.D. = PE 25.0x
25
L-T Average at 5.6x
6.0
30
-1 S.D. = 4.2x
4.0
-2 S.D. = PE 18.6x
-2 S.D. = 2.7x
3.0
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
2.0
Source: Bloomberg, Krungsri Securities
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
20
15
+1 S.D. = 7.0x
7.0
35
Source: Bloomberg, Krungsri Securities
Peer table
Name
Market
PE
P/BV
EV/EBITDA
DivYld
ROE
Share Price
Cap
(x)
(x)
(x)
(%)
(%)
Performance
15F
16F
15F
16F
15F
16F
15F
16F
1M
3M
6M
YTD
651
39.2
32.1
7.8
6.8
21.8
17.7
1.3
20.6
22.6
10.9
17.6
12.6
18.9
BANGKOK DUSIT MED SERVICE
8,095
36.7
31.2
5.7
5.1
18.6
16.0
1.3
16.7
16.5
0.0
-1.0
-6.9
9.9
BUMRUNGRAD HOSPITAL PUB CO
4,371
44.1
37.8
12.2
10.4
25.0
22.1
1.2
30.1
29.7
-5.7
21.9
46.1
53.9
-13.3
CHULARAT HOSPITAL PCL
BANGKOK CHAIN HOSPITAL PCL
US$
15F
472
34.9
29.5
3.7
3.4
16.2
14.3
1.7
11.0
12.2
0.7
-0.7
-16.0
RAMSAY HEALTH CARE LTD
8,591
26.3
23.0
6.2
5.5
12.1
11.0
2.0
23.7
24.0
-0.2
-4.0
-10.1
5.6
APOLLO HOSPITALS ENTERPRISE
2,895
46.3
36.5
5.5
4.9
23.1
19.0
0.5
12.2
14.9
5.2
7.4
0.9
21.3
KPJ HEALTHCARE BERHAD
1,007
29.6
27.2
3.1
2.9
15.2
13.5
1.7
10.9
11.1
0.0
4.5
13.8
RYMAN HEALTHCARE LTD
2,265
23.3
19.9
2.9
2.6
17.0
15.0
2.2
13.4
13.5
1.2
10.4
-9.9
-7.9
-15.4
RAFFLES MEDICAL GROUP LTD
1,878
36.6
32.1
4.5
4.1
26.6
22.7
1.2
12.9
13.6
6.4
3.1
20.8
19.5
11,047
50.7
41.7
0.8
0.7
23.7
20.5
0.5
4.6
5.5
-4.0
-7.3
-11.2
3.8
36.7
31.1
6.3
5.6
18.9
16.2
1.4
17.9
18.7
IHH HEALTHCARE BHD
Average (Simple)
Source: Company data, Bloomberg, Krungsri Securities
Krungsri Securities Research
10
Company Update | CHG
September 24, 2015
Quarterly P&L (Btm)
Sales
COGS (incl. dep’n)
Gross profit
SG&A
Operating Profit
Net other income/expense
Net interest
Pretax profit
Income Tax
Associates
Minority interest
Profit after tax (pre-ex)
Extraordinaries, GW & FX
Reported net profit
2Q14
644
-417
227
-90
137
11
-0
148
-30
0
0
118
1
118
1Q15
732
-478
254
-93
161
6
-0
167
-33
0
0
133
4
133
2Q15
825
-539
286
-97
189
10
0.0
199
-40
0
0
159
5
159
yoy
13%
13%
13%
5%
17%
76%
NA
19%
19%
NA
NA
19%
25%
19%
qoq
28%
29%
26%
8%
37%
-7%
NA
35%
33%
NA
NA
35%
400%
35%
Shares out (end Q, m)
Adjusted shares (m)
1,100
1,100
1,100
1,100
1,100
1,100
0%
0%
0%
0%
Pre-ex EP S
EPS
0.11
0.11
0.12
0.12
0.14
0.14
19%
19%
35%
35%
Depreciation
EBITDA
33
170
39
200
36
224
-8%
12%
8%
32%
Krungsri Securities Research
11
Company Update | CHG
September 24, 2015
INCOME STATEMENT (Btm)
Turnover
Cost of sales (COGS)
Depreciation & amortization
Gross profit
S&A expense
Operating profit
Other operating income
EBIT
Interest expense
Interest income
Other income
Goodwill amortization
Pre-tax profit
Income tax on company & subsidiaries
Profit after tax
Minority interests
Share of associate net income
Preferred dividends
Recurring attributable net profit
Extraordinary items
Reported net profit
2013
2,221
(1,336)
(111)
775
(287)
488
13
500
(2)
20
0
0
519
(105)
414
0
0
0
414
0
414
2014
2,672
(1,620)
(136)
916
(359)
556
23
580
(1)
20
0
0
598
(118)
481
(0)
0
0
481
0
481
2015F
3,223
(1,953)
(145)
1,124
(422)
702
23
726
(2)
27
0
0
751
(150)
601
0
0
0
601
0
601
2016F
3,903
(2,353)
(178)
1,371
(511)
860
24
884
(1)
33
0
0
915
(183)
732
0
0
0
732
0
732
2017F
4,695
(2,826)
(194)
1,675
(610)
1,065
24
1,089
(0)
40
0
0
1,128
(226)
903
0
0
0
903
0
903
Shares in issue (Y/E, m)
Shares in issue (weighted avg. m)
EPS (before extraordinary items, Bt)
DPS (Bt)
DPS/EPS (%)
11,000
11,000
0.04
0.03
72
11,000
11,000
0.04
0.03
69
11,000
11,000
0.05
0.03
50
11,000
11,000
0.07
0.03
50
11,000
11,000
0.08
0.04
50
CASH FLOW (Btm)
Operating profit
Other operating income
EBIT
Depreciation & amortisation
EBITDA
Notional cash taxes on ungeared operations
Net change in working capital
CAPEX
Operating free cashflow (OpFCF)
Net interest income adjusted for tax impact
Net free cashflow (NetFCF)
Non-operating income (net of tax)
Equity income from associates
Investments
Net change in other assets/liabilities
Other items
Residual cashflow (RCF)
2013
488
13
500
111
611
(102)
(839)
(429)
(759)
12
(747)
0
0
4
(4)
(0)
(748)
2014
556
23
580
136
716
(115)
490
(601)
490
5
495
0
0
0
(31)
0
463
2015F
702
23
726
145
871
(146)
(70)
(550)
104
21
126
0
0
0
383
0
509
2016F
860
24
884
178
1,062
(178)
(88)
(300)
495
27
522
0
0
0
0
0
522
2017F
1,065
24
1,089
194
1,282
(220)
(102)
(100)
860
34
894
0
0
0
0
0
894
Dividends
Equity capital raised
Other items
Cashflow from financing
(255)
1,353
0
1,098
(319)
0
4
(315)
(374)
(0)
0
(374)
(300)
(0)
0
(300)
(366)
(0)
0
(366)
350
141
491
0.0
148
491
639
0.1
135
639
774
0.1
222
774
996
0.1
528
996
1,524
0.1
262
88
398
(434)
(835)
183
(34)
465
973
498
147
(12)
579
554
521
180
42
705
695
480
528
0
869
860
894
Net change in cash
Net cash/(debt) at YS
Ending net cash /(debt)
Ending net cash /(debt) per share
Increase/(decrease) in cash & equivalents
(Increase)/decrease in debt
NOPLAT (net op profit less adjusted tax)
Normalised OpFCF (est maint CAPEX)
FCFE (free cashflow to equity)
Krungsri Securities Research
12
Company Update | CHG
September 24, 2015
BALANCE SHEET (Btm)
Cash & equivalents
A/C receivable
Inventory
Others
Total Current Assets
Property and equipment
Investments & associates
Other assets
Goodwill
Total Assets
2013
496
152
75
1,045
1,767
1,082
0
146
0
2,994
2014
678
162
87
595
1,522
1,557
0
186
0
3,266
2015F
825
174
104
718
1,822
1,962
0
186
0
3,970
2016F
1,005
189
126
870
2,190
2,084
0
186
0
4,460
2017F
1,534
207
151
1,046
2,938
1,990
0
186
0
5,114
Short-term debt
A/C payable
Other current liabilities
Total Current Liabilities
Long-term debt
Other liabilities
Total Liabilities
1
269
71
341
4
11
356
32
328
74
434
7
20
461
44
395
89
529
7
403
939
2
476
108
586
7
403
997
2
572
130
704
7
403
1,114
Share capital
Share premium
Revaluation/Warrants/Treasury
Translation adjustment
Retained earnings
Total ordinary equity
Preferred equity
Minorities
Total Equity & Minorities
1,100
1,146
0
0
393
2,639
0
0
2,639
1,100
1,146
0
0
554
2,800
0
4
2,804
1,100
1,146
0
0
781
3,027
0
4
3,031
1,100
1,146
0
0
1,213
3,459
0
4
3,463
1,100
1,146
0
0
1,749
3,995
0
4
4,000
Accumulated depreciation
BV per ordinary share (Y/E, Bt)
Adjusted book value ps (Y/E, Bt)
834
0.24
0.24
930
0.25
0.25
1,076
0.28
0.28
1,254
0.31
0.31
1,448
0.36
0.36
RATIOS (%)
Growth
Turnover
EBITDA
EBIT
Net profit
EPS pre extraordinary items
EPS (diluted)
DPS
2013
2014
2015F
2016F
2017F
19.2
15.4
16.9
23.6
(1.1)
(1.1)
(77.5)
20.3
17.0
15.8
16.0
16.0
16.0
11.1
20.6
21.7
25.2
24.9
24.9
24.9
(9.0)
21.1
21.9
21.8
21.9
21.9
21.9
21.9
20.3
20.7
23.2
23.3
23.3
23.3
23.3
Accounting Ratios
Cash profit margin
Gross profit margin
Operating profit margin
Net profit margin
Turnover/avg. total assets (x)
ROA
ROE
S&A/turnover
Effective tax rate
39.9
34.9
22.0
18.7
1.0
18.2
22.0
12.9
20.2
39.4
34.3
20.8
18.0
0.9
15.4
17.7
13.4
19.7
39.4
34.9
21.8
18.6
0.9
16.6
20.6
13.1
20.0
39.7
35.1
22.0
18.8
0.9
17.4
22.6
13.1
20.0
39.8
35.7
22.7
19.2
1.0
18.9
24.2
13.0
20.0
Operating Performance
EBITDA margin
EBIT margin
NOPLAT margin (NOPLAT/Turnover)
Asset turnover (Turnover/avg Op assets)
ROCE (NOPLAT/avg Op assets)
ROCE incl. capitalized goodwill
27.5
22.5
17.9
1.4
25.4
25.4
26.8
21.7
17.4
1.2
21.5
21.5
27.0
22.5
18.0
1.5
26.2
26.2
27.2
22.6
18.1
1.7
29.9
29.9
27.3
23.2
18.5
1.9
35.2
35.2
Krungsri Securities Research
13
Company Update | CHG
EQUITY VALUATIONS (Bt)
EPS
FDEPS
FDEPS growth (%)
DPS
BVPS
Adjusted BVPS
Free cashflow to equity (FCFE) per share
Share price (Bt) – 2.14
PE (x)
PE (fully diluted, x)
PE/FDEPS growth (x)
Yield (%)
P/BV (x)
P/ABV (x)
P/FCFE (x)
ENTERPRISE VALUATIONS (Btm)
Ordinary shares (m)
Share price (Bt)
Ordinary equity MV
MI & deferred taxes
Equity MV (adjusted ord)
Preferred equity
Debt
Enterprise Value
Net noncore assets
Core Enterprise Value (EV)
Turnover
EBITDA
EBIT
NOPLAT
OpFCF
OpFCF (normalized)
Op (core) capital employed (CE)
Avg. core capital employed
Core EV Multiples
EV/Turnover (x)
EV/EBITDA (x)
EV/EBIT (x)
EV/NOPLAT (x)
EV/OpFCF (x)
EV/OpFCFnormalised (x)
EV/capital employed (YE, x)
EV/avg capital employed (x)
RISK MEASURES
Equity multiplier (avg. total assets/avg. equity)
Net debt/equity & MI
Interest cover (x)
Interest cover (EBIT & int.incl/int. expense)
NOPLAT/interest paid
Debt service (OpFCF/net interest paid)
Short-Term Ratios (x)
Current assets/current liabilities
Current assets less inventory/current liabilities
A/C receivable, days turnover
Inventory, days COGS
A/C payable, days COGS
Krungsri Securities Research
September 24, 2015
2013
0.04
0.04
(1.09)
0.03
0.24
0.24
(0.08)
2014
0.04
0.04
15.98
0.03
0.25
0.25
0.05
2015F
0.05
0.05
24.95
0.03
0.28
0.28
0.05
2016F
0.07
0.07
21.95
0.03
0.31
0.31
0.04
2017F
0.08
0.08
23.28
0.04
0.36
0.36
0.08
56.8
56.8
(52.3)
1.3
8.9
8.9
(28.2)
49.0
49.0
3.1
1.4
8.4
8.4
47.3
39.2
39.2
1.6
1.3
7.8
7.8
45.2
32.1
32.1
1.5
1.6
6.8
6.8
49.0
26.1
26.1
1.1
1.9
5.9
5.9
26.3
2013
11,000
10
110,000
0
110,000
0
5
110,005
496
109,509
2014
11,000
18
198,000
4
198,004
0
39
198,043
678
197,365
2015F
11,000
2
19,800
4
19,804
0
51
19,855
825
19,030
2016F
11,000
2
19,800
4
19,804
0
9
19,813
1,005
18,808
2017F
11,000
2
19,800
4
19,804
0
9
19,813
1,534
18,280
2,221
611
500
398
(759)
(434)
2,148
1,565
2,672
716
580
465
490
973
2,165
2,157
3,223
871
726
579
104
554
2,257
2,211
3,903
1,062
884
705
495
695
2,467
2,362
4,695
1,282
1,089
869
860
860
2,475
2,471
49.3
179.1
218.8
274.9
(144.2)
(252.5)
51.0
70.0
73.9
275.8
340.5
424.8
403.0
202.8
91.1
91.5
5.9
21.8
26.2
32.9
182.5
34.3
8.4
8.6
4.8
17.7
21.3
26.7
38.0
27.0
7.6
8.0
3.9
14.3
16.8
21.0
21.2
21.2
7.4
7.4
2013
1.2
n/a
2014
1.2
n/a
2015F
1.2
n/a
2016F
1.3
n/a
2017F
1.3
n/a
n/a
68.5
n/a
n/a
38.5
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
5.2
5.0
24.9
20.5
73.5
3.5
3.3
22.1
19.5
73.9
3.4
3.2
19.7
19.5
73.9
3.7
3.5
17.7
19.5
73.9
4.2
4.0
16.1
19.5
73.9
14
Corporate Governance Report of Thai Listed Companies 2014
Thai Institute of Director (IOD)
BAFS
KBANK
SAT
BCP
BTS
CPN
EGCO
GRAMMY
HANA
INTUCH
IRPC
IVL
KKP
KTB
MINT
PSL
PTT
PTTEP
PTTGC
SAMART
SAMTEL
SC
SCB
SE-ED
SIM
SPALI
TISCO
TMB
TOP
To recognize well performers, the list of companies attaining "Good", "Very Good" and "Excellent" levels of recognition
without regulatory notation (from January 1, 2013 to October 22, 2014) is publicized.
AAV
BBL
CK
ERW
LANNA
NINE
PJW
RS
SSF
TIP
TSTH
ACAP
BECL
CNT
GBX
LH
NKI
PM
S&J
SSI
TIPCO
TTA
ADVANC
BIGC
CPF
GC
LHBANK
NMG
PPS
SAMCO
SSSC
TK
TTW
ANAN
BKI
CSL
GFPT
LOXLEY
NSI
PR
SCC
STA
TKT
TVO
AOT
BLA
DELTA
GUNKUL
LPN
OCC
PRANDA
SINGER
SVI
TNITY
UAC
ASIMAR
BMCL
DRT
HEMRAJ
MACO
OFM
PS
SIS
TCAP
TNL
VGI
ASK
BROOK
DTAC
HMPRO
MC
PAP
PT
SITHAI
TF
TOG
VNT
ASP
CENTEL
DTC
ICC
MCOT
PE
QH
SNC
THAI
TRC
WACOAL
BANPU
CFRESH
EASTW
KCE
NBC
PG
RATCH
SNP
THANI
TRUE
BAY
CIMBT
EE
KSL
NCH
PHOL
ROBINS
SPI
THCOM
TSTE
2S
AMATA
BEC
CGS
DEMCO
GLOW
IRCP
MAKRO
MOONG
PACE
PTG
SEAOIL
SPC
SYNEX
TIC
TRT
UPOIC
ZMICO
AF
AP
BFIT
CHOW
DNA
GOLD
ITD
MATCH
MPG
PATO
QLT
SFP
SPCG
SYNTEC
TICON
TRU
UT
AH
APCO
BH
CI
EA
HOTPOT
KBS
MBK
MTI
PB
QTC
SIAM
SPPT
TASCO
TIW
TSC
UV
AHC
APCS
BJC
CKP
ESSO
HTC
KGI
MBKET
NC
PDI
RCL
SIRI
SST
TBSP
TKS
TTCL
UWC
AIT
AQUA
BJCHI
CM
FE
HTECH
KKC
MEGA
NTV
PICO
SABINA
SKR
STANLY
TEAM
TLUXE
TUF
VIH
AJ
ARIP
BOL
CMR
FORTH
HYDRO
KTC
MFC
NUSA
PPM
SALEE
SMG
STEC
TFD
TMI
TVD
WAVE
AKP
AS
BTNC
CSC
FPI
IFS
L&E
MFEC
NWR
PPP
SCBLIF
SMK
STPI
TFI
TMT
TWFP
WHA
AKR
ASIA
BWG
CSP
GENCO
IHL
LRH
MJD
NYT
PREB
SCCC
SMPC
SUC
THANA
TNDT
UMI
WIN
AMANAH
AYUD
CCET
CSS
GL
INET
LST
MODERN
OGC
PRG
SCG
SMT
SWC
THIP
TPC
UP
WINNER
AMARIN
BEAUTY
CGD
DCC
GLOBAL
IRC
MAJOR
MONO
OISHI
PRIN
SEAFCO
SOLAR
SYMC
THREL
TPCORP
UPF
YUASA
Score Range
90-100
80-89
70-79
60-69
50-59
Below 50
Number of Logos
No logo given
Description
Excellent
Very Good
Good
Satisfactory
Pass
N/A
Disclaimer
The disclosure of the survey result of the Thai Institute of Directors Association (IOD) regarding corporate governance is made pursuant to
the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed
on the Stock Exchange of Thailand, and the Market of Alternative Investment disclosed to the public and able to be accessed by a general
public investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside
information.
The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey result
may be changed after that date. Krungsri Securities Public Company Limited does not confirm nor certify the accuracy of such survey result.
Krungsri Securities Public Company Limited
Headquarters
898 Ploenchit Tower, 3rd Floor, Ploenchit Road, Lumpini
Pathumwan, Bangkok 10330
Tel: 0-2659-7000 Fax: 0-2658-5699
Internet Trading: 0-2659-7777
Branches
Emporium
662 Emporium Tower, Fl. 10, Sukhumvit 24 Road
Klongton, Klongtoey, Bangkok 10110
Tel: 0-2695-4500 Fax: 0-2695-4599
Nakhon Pathom
67/1 Ratchadamnoen Road, Tambol Phra Pathom Jaedee,
Amphur Muang, Nakhon Pathom 73000
Tel: 0-3427-5500-7 Fax: 0-3421-8989
Central Bangna
589/151 Central City Tower 1 Office, Fl. 27
Bangna-Trad Road, Bangna, Bangkok 10260
Tel: 0-2763-2000 Fax: 0-2399-1448
Suphanburi
249/171-172 Moo 5 Tambol Ta Rahad,
Amphur Muang, Suphanburi, 72000
Tel: 0-3550-1234 Fax: 0-3552-2449
Rama II
111/917-919 Rama II Road, Smaedum,
Bangkhuntien, Bangkok 10150
Tel: 0-2895-9575 Fax: 0-2895-9557
Nakhon Ratchasima
168 Chomphon Road, Tambol Nai Muang,
Amphur Muang Nakhon Ratchasima,
Nakhon Ratchasima 30000
Tel: 0-4425-1211-4 Fax: 0-4425-1215
Vibhavadi-rangsit
Bank of Ayudhya Public Company Limited
123 Suntowers (B) Building, Vibhavadirangsit Road,
Jompol, Jatujak, Bangkok 10900
Tel: 0-2273-8388 Fax: 0-2273-8399
Khon Kaen
114 Sri Chan Road, Tambol Nai Muang,
Amphur Muang, Khon Kaen 40000
Tel: 0-4322-6120 Fax: 0-4322-6180
Chonburi
64/17 Sukhumvit Road, Tambol Bang Plasoi,
Amphur Muang, Chonburi 20000
Tel: 0-3879-0430 Fax: 0-3879-0425
Chiang Mai
70 Chang Phuak Road, Tambol Sri Phum
Amphur Muang, Chiang Mai 50200
Tel: 0-5321-9234 Fax: 0-5321-9247
Hat Yai Branch
90-92-94 Nipat U Tit Nueng Road,Tambol Hat Yai,
Amphur Hat Yai, Songkhla 90110
Tel: 0-7422-1229 Fax: 0-7422-1411
Chiang Rai
231-232 Thamalai Road, Tambol Wiang,
Amphur Muang, Chiang Rai 57000
Tel: 0-5371-6489 Fax: 0-5371-6490
Phitsanulok
275/1 Phichaisongkram Road, Tambol Nai Muang,
Amphur Muang, Phitsanulok 65000
Tel: 0-5530-3360 Fax: 0-5530-2580
Analyst Team
Sector Coverage
Naphat Chantaraserekul, Head of Research
Kittisorn Pruitipat, CFA, FRM
Central line:
662-659-7000
E-mail
Energy, Petrochemical, Strategy
ext. 5000
[email protected]
Property, ICT
ext. 5019
[email protected]
Jesada Techahusdin, CFA
Banking, Insurance, Consumer Finance ext. 5004
[email protected]
Sunthorn Thongthip
Food, Strategy
ext. 5009
[email protected]
Kaweewit Thawilwithayanon
Renewable Energy, Contractor
ext. 5010
[email protected]
Worrapong Tuntiwutthipong
Mid cap, Electronic, Media, Automotive, ext. 5016
[email protected]
Commerce
Teerapol Udomvej, Assistant Analyst
Healthcare
Songklod Wongchai
Investment Strategy
ext. 5003
[email protected]
Artit Jansawang
Small cap, MAI
ext. 5005
[email protected]
Apisak Limthumrongkul
Technical
ext. 5007
[email protected]
Fax 662-658-5643
Definition of Ratings
OUTPERFORM
- Stocks with an expected capital gain above 10% in the next 12 months for small-caps, above 5% for big-caps
NEUTRAL
- Stocks with an expected capital gain between -10% and +10% in the next 12 months for small-caps, -5% to +5% for big-caps
UNDERPERFORM
- Stocks with an expected capital gain below 10% in the next 12 months for small-caps, below 5% for big-caps
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