DISCLOSUREAPPENDIXATTHEBACKOFTHISREPORTCONTAINSIMPORTANTDISCLOSURES,ANALYSTCERTIFICATIONS,LEGALENTITYDISCLOSUREANDTHESTATUSOFNON-USANALYSTS.USDisclosure:CreditSuissedoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethattheFirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.8May2019AsiaPacific/ThailandEquityResearchHealthcareFacilitiesThailandHealthcareSectorResearchAnalystsThaniyaKevalee6626146219thaniya.kevalee@credit-suisse.comSiripornSothikul,CFA6626146217siriporn.sothikul@credit-suisse.comSECTORREVIEWPressureonhighend,smallnamesbetteroffFigure1:FY19-21averageEPSgrowthSource:Companydata,CreditSuisseestimates■DowngradeBDMStoNEUTRAL.High-endhospitalsinBangkokhavealreadyshownslower-than-averagegrowth.WithBHstartingaggressivepromotionsandnewcomerTPPHealthcareInternationalcompletingits550-bedfacilityin2Q20,weexpectcompetitiontoheatup(25%ofBDMS'srevenueisinthissegment).This,andlatestguidance,leadsto8-15%cutsinFY19-20EBDMSEPSandwelowerourTPtoBt24(fromBt30).■BettervalueinCHGandRJH.WeestimatesmallernamestodeliverbetterEPSgrowthwithROEexpansion.CHGshouldseeearningsgrowthinflectionfrom3Q19(inspiteofa6%EPSdowngradeoverFY19-20)andwithabigunderperformanceandvaluationdiscount,weupgradethestocktoanOUTPERFORM(TPraisedtoBt2.4fromBt2.3).WedowngradeBCHtoNEUTRALonitsstrongsharepricerunandFY19-20EEPSiscut5-8%.WeraiseRJH’sFY19-20EEPSby6-8%andmaintainOUTPERFORM.■Fairmultiplesreflectourpreference.OurTPsplaceBHandBDMSat1SDbelowtheirmean,implyingmultiplederatings.CHGandRJHshouldseesomemultiplereratingbutourtargetmultipleforCHGisalsoat1SDbelowthemeantoreflectourconservativejudgementinlightofpastdisappointments.WereplaceBCHwithCHGasourtoppickasvaluationshavediscountedlikelynegativeEPSgrowthduring1H19.■Regulatoryrisklikelybenign.Whilenoisemayre-emergeoccasionally,wedonotexpectdrasticactionfromregulators.Disclosureofpricesandcosts(ofmedi...
