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6 Jul 2023


Private hospitals, 2023: Profitability projected to be pressured by higher operating costs and intense competition (Current Issue No.3421)


        We at Kresearch expect that revenues of private hospitals listed on the Stock Exchange of Thailand (SET) will grow 3.7 percent YoY in 2023, a decline from that reported in 2022, due to the lower receipts from COVID-19 patients. Looking ahead, their revenues are set to gradually return to pre-pandemic levels, thanks to the recovery in Thai tourism that has seen the return of more international patients, particularly those from the Middle East. Such medical tourists along with those from CLMV (Cambodia, Lao PDR, Myanmar and Vietnam) are expected to visit Thailand during the high season in 1H23. Concurrently, private hospitals may continue to enjoy revenues from more Thai patients, both under and not under the social security program, as well.
        Although listed private hospitals here may continue to enjoy steady revenue growth in 2023, their profitability will likely be pressured by a number of factors. These include the high base of 2022, as reflected in the 42 percent YoY plunge in their 1Q23 revenues due to the lower number of COVID-19 patients. For the remainder of 2023, their profitability may be undermined further by the persistently high operating costs and intense competition, leading us to project that their profit will fall by roughly 8.5 percent YoY.
        Meanwhile, a shortage of medical personnel, particularly specialists, along with other factors related to the public sector, including drug and pharmaceutical price controls, policies on healthcare funds, including a possible overhaul of the social security system and access to medical services, such as annual health checkup and welfare for senior citizens, may affect operating performances of private hospitals in the future. 

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