Virus outbreak to boost Thai healthcare operators' revenue until end-2021 at least

THE Covid-19 pandemic could sustain the fortunes of Thailand's hospital operators, but a new government stimulus package approved on Monday is unlikely to spur the rest of the consumer sector, said analysts from Nomura in a set of recent reports.

On top of the ongoing surge in Covid-19 cases, analysts Thanatcha Jurukul and Umang Parekh cited "likely upside" from an alternative-vaccination roll-out in the private healthcare sector.

To be sure, they expect Thailand's coronavirus situation to improve in the second half of the year, which would mute the demand for Covid-19 services such as testing and hospitalisation.

Still, the distribution of alternative vaccinations "could be another major revenue driver" amid waning momentum for Covid-19 service providers, the analysts said.

Meanwhile, operators with heavy exposure to medical tourists, such as Bangkok Dusit Medical Services (BDMS) and Bumrungrad Hospital, are tipped to see turnover recover in 2022.

"We estimate a strong earnings growth outlook for BDMS in FY22-23F (a 37 per cent compound annual growth rate), driven by likely recovery of the medical tourism industry after mass vaccinations and lifting of travel restrictions," the analysts wrote.

However, they were less upbeat about the consumption boost from an e-voucher scheme that could cover up to 15 per cent of transactions at tax-registered vendors in the third quarter.

"Similar to the previous shopping incentive scheme, the e-voucher stimulus could benefit discretionary retailers and shopping malls," the analysts wrote, referring to an initiative last year.

But they called the e-wallet-based programme "less attractive to use", arguing that the e-vouchers cannot match the tax breaks available under the shopping scheme. That's even as the latest stimulus round is smaller than before, at 140 billion baht (S$6 billion), with most of the budget going to co-payment and e-voucher schemes that require upfront spending.