• 2Q26F earnings expected to be flat y/y and q/q, supported by Middle East recovery post-Ramadan and growth in Myanmar, while Thai demand remains soft
• Temporary Qatar A/R disruption due to process changes; collections expected to normalise by June–July
• Earnings CAGR of 4% over 2026-2028, supported by international patient growth and ongoing cost savings 
• Maintain BUY with DCF-based TP of THB200.00 

Key takeaways from 1Q26 analyst meeting on 29 April 2026: Overall tone slightly positive 

1Q26 performance recap. BH’s revenue increased by 1% y/y in 1Q26, driven by a 4.0% increase in pricing and a 7.1% rise in revenue intensity, partly offset by a 9.7% decline in volume. Revenue intensity increased in the Middle East (+37% y/y) and Indochina (+2% y/y), while Thailand declined (-0.3% y/y).

Revenue from international patients rose 4% y/y in 1Q26, mainly driven by growth from Qatar (+28.7% y/y), Myanmar (+15.1% y/y), Bangladesh (+25.0% y/y), and the UAE (+24.9% y/y). In contrast, revenue declined from the US (-6.5% y/y), China (-16.2% y/y), Mongolia (-7.3% y/y), and Cambodia (-78%).

Middle East revenue rose 21.3% y/y and contributed 22% of total revenue in 1Q26 (vs. 18% in 1Q25 and 27% in 2025). Approximately 75% of ME patients are under guarantee of payment (GOP), while the remaining 25% are self-pay. Thailand remains a key referral destination for Middle Eastern patients, particularly for complex treatments (which management describes as a niche market), at lower costs compared with the US or Europe. In contrast, most government-built hospitals in the Middle East primarily serve basic treatments and expatriate populations.

Update on Kuwait. BH has already settled its outstanding A/R with Kuwait in 4Q25. Discussions on a potential partnership are ongoing; although progress has slowed due to geopolitical tensions, the long-term outlook remains positive.

A/R days spike on process change; normalisation by June–July. A/R increased from THB4.3bn in 4Q25 to THB5.3bn in 1Q26, mainly due to process changes following Qatar’s rollout of a digital claims submission platform and the use of a third-party insurer for document review. BH expects the process to stabilise, with faster claims processing by June–July.

BH’s length of stay (LOS) increased to 4.9 days in 1Q26 (vs. 4.5 days in 1Q25 and 5.2 days in 4Q25), while bed utilization was 70% (vs. 71% in 1Q25 and 72% in 4Q25). The average length of stay (ALOS) for Thai and Middle Eastern patients was 3 days and 30 days, respectively, in 1Q26.

BH’s discount rate was 12.2% in 1Q26 (vs. 12% in 1Q25 and 11.9% in 2025).

Bed capacity not a concern. BH had an IPD bed capacity of 486 beds in 1Q26 (vs. 483 in 1Q25 and 510 in 4Q25). BH plans to expand capacity with 59 beds at its new Soi 1 building in 2027 and 120 beds at its Phuket campus in 2Q27F.

Management guided for 2% y/y revenue growth (±) in 2Q26F (slightly improving from 1.4% y/y in 1Q26), supported by post-Ramadan recovery in ME patients, with patient volume expected to be higher than in 1Q26. Meanwhile, Thai patient demand faces headwinds from tighter insurance policies, particularly in paediatrics. BH targets cost savings in 2026 and has already achieved 32% of this target in 1Q26.

Expansion plans. BH plans to launch the Soi 1 project and annex building, while the 212-bed greenfield hospital in Phuket (BIH Phuket) is set to open in 2027. BIH Phuket is expected to break even at the EBITDA level within 12–18 months.

New greenfield clinic in Bangladesh. BH plans to launch a primary screening facility (OPD clinic) in Bangladesh in 3Q–4Q26 in partnership with a local partner. While the investment value has not been disclosed, we believe it is not significant. Revenue contribution from Bangladesh was 3% of total revenue in 1Q26, and BH expects a positive growth trend going forward.

Limited impact from potential shortages of medicines and medical supplies. BH is confident in its inventory, with sufficient stock for 1–3 months and prices locked in advance for one year.

Outlook

Expect 2Q26F earnings to be flat y/y and q/q. We forecast BH’s earnings at THB1.8bn in 2Q26F (flat y/y and q/q), supported by continued strength in key markets such as the Middle East (from a low base last year), as well as Myanmar and Bangladesh, with volume improving after Ramadan. However, Thai patient demand remains under pressure due to seasonality and tighter insurance policies, particularly in paediatrics.

We expect an earnings CAGR of 4% over FY26F–FY28F. Key drivers include i) patient volume from existing markets such as the Middle East, China, and the US, as well as new markets; ii) the return of Kuwaiti patients; and iii) ongoing cost savings.

Maintain BUY with TP of THB200.00. We remain positive on BH, as we believe the impact from the US–Iran conflict is already reflected in the share price, with downside risk appearing limited. BH currently trades at 19.2x FY26F P/E (below -1 S.D. of its five-year average). Key catalysts include new markets such as Kuwait and Saudi Arabia.