The Thai healthcare sector’s growth is expected to slow down in 3Q22 as demand for medical tourism seems to normalize after a rapid recovery, said UOB Kay Hian.
The think tank forecasts a return to normalcy in treatment demand and revenue intensity as recreational tourism recovers more quickly than in comparison.
In addition, it stated that big hospital chains like Bangkok Chain Hospital (SET: BCH) and Chularat Hospital (SET: CHG) are currently selling at a premium on the positive outlook for the medical tourism recovery “have been substantially priced in” for such defensive assets.
As healthcare companies’ profit margins are likely to be squeezed by rising minimum wage and incentive payments from inflationary pressures, UOB Kay Hian has downgraded its sector recommendation to “underweight”.
Additionally, the analyst at UOB Kay Hian recommended trading Bumrungrad Hospital (SET: BH) and Bangkok Dusit Medical Services (SET: BDMS), which have a “hold” rating.