BCH-CHG Expected to Benefit Most from SSO Capitation Payment Rise

In light of the Social Security Office (SSO) committee’s decision to increase capitation payments by 10.2%, analysts are increasingly positive about Thailand’s healthcare sector, with BCH and CHG expected to be prime beneficiaries.

The Social Security Office (SSO) committee agreed on 10 April to increase capitation payments from THB1,640 per person to THB1,808, which is a greater rise than was anticipated by the market. This will take effect on May 1st, 2023.

Krungsri Securities raised its earnings estimates for both Bangkok Chain Hospital Pcl. (SET: BCH) and Chularat Hospital Pcl. (SET: CHG) by 2% for the period 2023-25 on the expectation that they will reap the most benefit from the SSO’s increased capitation payment. Bumrungrad Hospital Pcl. (SET: BH) will not be affected in any way, whereas Bangkok Dusit Medical Services Pcl. (SET: BDMS) will enjoy slight gains. In response to the improved profits forecast, Krungsri Sec. raised their target price for BCH by 2% to THB26.5/share and for CHG by 2% to THB4.1/share. Maintain a BUY rating for BCH and a HOLD rating for CHG.

Trinity Securities is more positive about the healthcare sector after the SSO has agreed to raise the capitation payment. Especially BCH and CHG, which rely heavily on social security patients for revenues, should see improvements in both revenue and profit. BCH had 900,000 social security patients, whilst CHG had 520,000. Trinity continues to recommend a “BUY” for both companies, with a target price of THB23.60 for BCH and THB4.70 for CHG, respectively.