Mr. Teerapol Udomvej, CFA, Kiatnakin Phatra Securities (KKPS), provided insights into Thailand’s hospital sector and medical tourism landscape, noting that the sector continues to face pressures from rising healthcare expenditures, which are growing at an average rate of 5-6% per year, outpacing GDP growth. This is causing healthcare costs to increasingly crowd out the country’s investment budget, while Thailand’s public debt now stands near the 70% legal ceiling, at around 68% of GDP.
Looking ahead, Mr. Teerapol emphasized the need to improve budgetary efficiency in the healthcare system, particularly through leveraging digital systems to integrate payment data in the 30-baht universal healthcare scheme, reduce redundancies, and prevent inappropriate claims. He also suggested promoting preventive healthcare to reduce long-term costs, considering co-payment schemes, and expanding the base of social security subscribers to enhance the sustainability of the healthcare system.
Thailand’s medical tourism sector still shows strong growth potential, supported by competitive pricing and high medical standards. Thai medical costs are about 20-30% lower than those in Singapore and 50-60% below those in the U.S. and Europe. Medical tourism in Thailand is growing at an average annual rate of 9-10%, with the majority of international patients coming from the Middle East and CLMV countries. The U.S. market, expats living in Thailand, as well as patients from Indonesia and China, also present future growth opportunities.
Mr. Teerapol pointed out that hospital stocks have come under pressure over the past 1-2 years due to stricter insurance claim conditions and a 60-80% decline in Cambodian patient numbers, leading to a 10-20% drop in hospital stock prices and a decrease in P/E ratios from around 30x to about 20x. Additionally, continued Middle East conflict has delayed patients from that region seeking treatment in Thailand.
However, KKPS sees early signs of recovery emerging in 3Q26, with the insurance impact and Cambodian patient numbers starting to stabilize. Hospital sector revenues grew only 1-2% in the first half of 2026, but by July-August, growth had accelerated to approximately 6-7%, coinciding with the high season for hospitals due to increased incidence of flu and other seasonal illnesses.
For the hospital stocks under coverage, KKPS analyzed Bumrungrad Hospital (BH), with 60-70% of revenue from foreign patients; Bangkok Dusit Medical Services (BDMS), at around 30%; Praram 9 Hospital (PR9), at 26%; Bangkok Chain Hospital (BCH), at 13%; and Chularat Hospital (CHG), at 4%.
KKPS recommends ‘Buy’ ratings on all, viewing current valuations as attractive, with dividend yields now at around 4-5% compared to 1-2% historically. Target prices were set at THB 230 for BH, THB 23.50 for BDMS, THB 24.50 for PR9, THB 13 for BCH, and THB 2 for CHG. These stocks offer both short-term trading opportunities given the expected earnings recovery in the latter half of 2026, as well as long-term defensive holdings.
Additionally, the wellness segment is poised for growth due to higher net margins—hospitals generally report net margins of 10-15%—and global wellness demand, which is increasing by nearly 10% per year. This trend aligns with business expansion by BDMS and BH.
Thailand’s health insurance market also has room for growth, as only about 6% of Thais currently purchase health coverage. Life insurance riders offer long-term coverage, while non-life policies are annual contracts with premiums subject to adjustment based on claim history, as per the brokerage.
