KGI Securities (KGI) anticipates that the ongoing conflict between the United States and Iran will negatively affect sentiment in Thailand’s healthcare sector, particularly for hospitals with significant exposure to Middle Eastern (ME) patients.
Major listed hospitals, including Bumrungrad Hospital (BH), Bangkok Dusit Medical Services (BDMS), Bangkok Chain Hospital (BCH), and Chularat Hospital (CHG), rely on revenue streams from these international clients. BH is expected to experience the greatest impact in the event of reduced patient flows from the Middle East, given that approximately 27% of its total revenue in 2025 was derived from ME patients.
Medical tourism remains a bright spot for the Thai healthcare sector. According to the Tourism Authority of Thailand (TAT), the average spending per medical tourist has now reached THB 107,662 per trip, more than double that of typical leisure tourists. The sector has been further buoyed by eased visa policies and the implementation of the government’s ‘10-year Medical Hub Plan,’ which is expected to attract more long-haul patients from the Middle East and Europe seeking long-term care.
A broader transformation is underway in the healthcare landscape, with a growing focus on the ‘Wellness Economy’. In the first quarter of 2026, a significant public-private partnership was announced, aiming to establish Thailand as a regional leader in wellness, preventive medicine, and longevity programs.
This shift is partially driven by an aging population, with projections that 21% of Thais will be elderly by 2030. As a result, 2026 is witnessing increased investment in specialized elderly care facilities and the adoption of ‘Smart Living’ technologies.
Despite geopolitical headwinds, KGI Securities expects most hospitals to record year-on-year earnings growth in the first quarter of 2026. This forecast is underpinned by a continued recovery in both Thai and foreign patient volumes, as seen since the beginning of the year.
From a valuation perspective, healthcare stocks are currently trading at the lower end of their price-to-earnings (PE) bands, specifically -1 to -2 standard deviations below their historical averages. This follows a period of extraordinary performance during the COVID-19 pandemic (2020–2023), where hospitals reported record revenue and profits. Although a return to those peak profit levels appears unlikely, the current low valuations present potentially attractive entry points for investors.
KGI estimates that the healthcare sector’s earnings will grow by approximately 4.6% year-on-year in 2026. The firm maintains an ‘Overweight’ rating on the sector, forecasting that most hospitals will report YoY earnings growth in the first quarter, supported by a low base effect, increased patient numbers, a greater share of high-severity cases, and no further adverse impacts from reimbursement issues related to RW>2 benchmarks.
Within the sector, BCH and BDMS are the brokerage’s preferred picks, with projected upside supported by BCH’s anticipated robust earnings acceleration from 2026 onward and BDMS’ diversified hospital platform. Target prices based on discounted cash flow (DCF) valuations are THB 14.00 for BCH and THB 23.00 for BDMS.
