The Thai healthcare sector, which has seen its stocks drop by 25% year-to-date and underperform the SET index by 17%, is forecast to rebound in 2026 as growth normalizes and valuations remain attractive, according to Kiatnakin Phatra Securities’ (KKPS) latest industry outlook.
KKPS expects sector earnings to grow by 9% in 2026, up from a subdued 2% in 2025, which should revive market attention. Current sector valuations, trading at around 17 times 2026 expected earnings, look appealing when compared to 29 times for Malaysian and Singaporean hospital stocks. The firm maintains an overweight rating on the sector.
Revenue from Thai patients is anticipated to slightly improve, growing 4% in 2026 from 3% in 2025, outpacing the broader Thai GDP growth forecast and underscoring the sector’s resilience. Insurance-patient revenue growth has leveled off due to the introduction of a co-pay scheme, but robust insurance premium growth—averaging an 8% annual increase from 2019-2024 and 14% in the first nine months of 2025—remains a long-term positive.
For international patients, revenue growth will slow from 6% in 2024 to just 2% in 2025 amid weaker tourist arrivals and sharply reduced Cambodian patient flows due to ongoing political tensions. However, excluding Cambodia, growth is projected at 4-5%. An 8% rebound is forecast for 2026, helped by the low base of comparison. The Middle East remains a key segment, with patient revenue expected to rise 6-8% in 2026, driven notably by Qatari patient inflows at BDMS and PR9 hospitals. Any return of Kuwaiti patients—supported by progress in settling payments and the planned establishment of a medical office in Thailand—could provide additional upside.
Patients using Thailand’s Social Security Office (SSO) system are set to provide a 5% revenue increase in 2026, fuelled by growth in insured members and higher case intensity. Government decisions to gradually increase the wage base for SSO contributions, starting in 2026, should strengthen the fund and be supportive for the sector.
Among hospital stocks, BDMS is KKPS’ top pick, backed by the potential for record-high core profit in the fourth quarter of 2025 and robust growth from Middle East patients. PR9 is also favored; recent share price weakness has been tied to accounting provisions resulting from longer payment cycles for Qatari patients. KKPS views PR9’s new service provider status for Qatari patients positively, believing it bodes well for future referral volumes.
