Land and Houses Securities (LHS) has released its analysis on Bangkok Chain Hospital Public Company Limited (SET: BCH), projecting a net profit of THB 268 million for the first quarter of 2026. This represents a year-on-year decrease of 17% but a quarter-on-quarter growth of 3%.
The recovery from the previous quarter is attributed to a low base effect in 4Q25, when there was an SSO revenue reversal and seasonal reductions in selling, general, and administrative expenses (SG&A). However, on a year-on-year basis, profit remains under pressure from weaker cash patient revenue and higher SG&A, with hospital renovation expenses adversely impacting the profit margin.
Revenue for the first quarter is expected to be THB 2.9 billion, remaining relatively flat at a growth of 0.6% year-on-year and a slight decline of 1.2% quarter-on-quarter. Income from social security and Middle Eastern patients continues to help offset the ongoing weakness in cash patient revenue, which reflects weak domestic purchasing power.
The absence of major outbreaks has limited the growth of outpatient (OPD) revenue, while income from Cambodian operations is still constrained by border issues.
Gross profit is expected to decrease by 4.3% year-on-year but improve by 2% quarter-on-quarter, with recovery following the absence of a 53-million-baht one-off item that negatively affected 4Q25. On a year-on-year basis, the decline in higher-margin cash patient revenue is expected to reduce the gross profit margin to 27% from 28% in 1Q25.
SG&A expenses are forecasted to increase by 13% year-on-year but decline by 6% quarter-on-quarter, with the previous quarter affected by a high base due to bonus and personnel expenses. The rise in year-on-year SG&A is largely the result of increased depreciation and amortization costs from hospital upgrades, leading to a decrease in EBITDA margin to 22%, down from 25% in the first quarter of 2025.
Looking ahead to the second quarter of 2026, LHS expects stable performance year-on-year, with a quarter-on-quarter decline anticipated due to the ongoing conflict in the Middle East limiting the full recovery of Middle Eastern patient traffic. On a year-on-year basis, comparison will be to a high base, as social security income for 26 chronic diseases was received earlier than usual in the second quarter of 2025, rather than the typical third quarter.
The brokerage has revised its recommendation to ‘Buy on Weakness’ from a previous ‘Speculative Buy,’ maintaining a target price of THB 11.60 per share. The adjustment reflects the ongoing uncertainty in the recovery of both revenue and profit margins, and LHS suggests accumulating the stock should the share price experience downward pressure.
Moreover, several key risk factors are outlined as follows: 1) changes in policies or legislation affecting hospital business operations; 2) the slow recovery of Thailand’s economy; 3) reduced seasonal disease outbreaks; 4) investment in new hospital construction not achieving desired outcomes; and 5) risks from exchange rate volatility and inflation in the Lao PDR.
