Land and Houses Securities (LHS) stated that Bangkok Dusit Medical Services Public Company Limited (SET: BDMS) is taking a cautious approach to its 2026 revenue target, aiming for a modest 2–4% year-on-year (YoY) growth, amid continuing uncertainties related to the ongoing Middle East conflict and a sluggish recovery in the Thai economy.
The revenue breakdown anticipates growth of 1–3% YoY for Thai patients while targeting a stronger 5–7% increase from international patients. BDMS also aims to keep its EBITDA margin steady at 24%, focusing on profit quality, asset utilization efficiency, and maintaining capital expenditure (Capex) at 8–10% of revenue. The strategy emphasizes necessary investments over aggressive bed expansion.
To enhance operational efficiency, BDMS continues its development of an integrated Health Ecosystem within its network, aiming to improve productivity and service quality through the adoption of artificial intelligence (AI) and data analytics, rather than increasing staffing levels in the short term.
Short-term impacts from the Middle East situation are limited, as the ongoing Ramadan period is typically a low season for medical tourism. At present, revenue from Middle Eastern patients accounts for about 4% of total revenue, and there have been no significant case cancellations.
However, management will continue monitoring the recovery pace of Middle Eastern patients post-Ramadan and any changes in travel restrictions or airspace openings, as these will directly influence the timing and extent of foreign revenue recovery.
In January 2026, BDMS recorded slight revenue growth, driven primarily by a 2% YoY increase in international patients. Notable growth came from European patients (+12% YoY) and those from the Middle East (+10% YoY), whereas patients from the CLMV countries (Cambodia, Laos, Myanmar, and Vietnam) declined by 24% YoY. Domestic patient numbers remained stable.
The analyst expects BDMS to deliver 4% YoY profit growth in 2026, slightly lower than the previous estimate of 8%. This projection is supported by the expansion into the insurance client segment, improving inbound international patients from China and Europe as tourism rebounds, a stable patient base from Myanmar, and efficient cost management.
LHS reiterates a ‘Buy’ recommendation but adjusts the target price to THB 25 per share (previously THB 26), reflecting a 3% downward earnings revision. The valuation uses a DCF method with a WACC of 7.4% and a long-term growth rate of 3%, equivalent to a FY2026 P/E of 24x (current P/E is 19x).
BDMS maintains its industry leadership with a robust hospital network and strong brand. The company plans to pay a second-half 2025 dividend of THB 0.65 per share, implying a 3.4% dividend yield based on Wednesday’s closing price. Notably, the ex-dividend (XD) date is set for March 10, 2026.
Key risks for the company, according to the brokerage, include: 1) a slowdown in domestic tourism; 2) macroeconomic pressures in Thailand; 3) seasonal disease outbreaks; 4) changes in relevant business laws and regulations; 5) instability in the Middle East.
