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From the casethat Bangkok Dusit Medical Services PCL (BDMS) sells shares of Bumrungrad Hospital (BH) 22.71% of total holdings, worth 1.86 billion baht
Although BDMS had previously tried to buy all of BH’s BH (Offer to Purchase) shares at a price of 125 baht since early 2020, after that, in August, BDMS decided to cancel the plan.
However, if he returns before then Another group of BH’s major shareholders, the Sophon Phanich family, seems reluctant to release the shares they own. Making decisions for Bangkok Bank Public Company Limited (BBL) exercised the right to convert the obligations it owns. And it acquired almost 10% more shares of BH, which resulted in the joint participation of the Sophonpanich Group It finally exceeded BDMS
Looking at the price movement of BDMS and BH shares after the transaction report, both shares were found to be down dramatically, with BDMS dropping 0.50 baht or 2.17% to 22.50 baht and BH declining 8 , 50 baht or 6.88% at 115 baht.
Thakon Bunjongrak, Director of Investment Analysis at Yuanta Securities (Thailand) previously disclosed that BDMS had previously tried to become a major BH shareholder, but faced a problem with BH’s existing major shareholder when the deal was finalized. Failure to become an affiliate Along with changing business image AND more intense competition Effects of being attracted to foreign staff AND clients reduced by the COVID-19 epidemic
“For these reasons In addition, BH’s share price has increased. It is a good time to sell, allowing BDMS to invest money to expand other hospitals. In its own chain At the same time, this deal still has a profit of approximately 1.1 billion baht, which should be registered in time for the fourth quarter. “
In fact, the previous bounce in BH’s price is beyond fundamental. Considering Consensus’s opinion, the price is around 110 baht, while BH’s share price has risen to 125 baht, thanks to the development of the vaccine. Good timing, the details of this deal will be revealed through the stock exchange on November 26.
On the corner of BDMS, which is also in the hospital business. Even if it is affected by COVID-19 But with a chain of hospitals larger than BH, which only has one branch When it hits, it is relatively lighter. Regarding our investment strategy, we recommend selling BH at a price that exceeds the basic, BDMS recommends buying with a positive sentiment from this sale of BH shares.
Nomura Pattanasin Securities estimates that BDMS should receive a total gain of approximately 2,367 million baht from the sale of BH shares and record an after-tax gain of approximately 1,114 million baht through the 2020 financial statements after BDMS has a cost of BH about 89.30. baht
Regarding the impact on BH’s profit share, the BDMS profit forecast is expected to decline by approximately 3-4% and affect the target price of approximately 0.80 baht, based on the target price of 25.30 baht.
Initially, the viability of the new BH shareholders was assessed in two cases:
1. More than 80% of the peso is likely to be another major shareholder, the Sophonpanich family, which we see as a long-term positive. This is because it is expected not to affect the current changes in the management structure. Will this change in the shareholding structure lead to a public offering and a market exit?
2. Make the weight less than 20% as a new shareholder. We see it as a more negative factor on the price of the shares than the first instance. Since this may affect the future management of the BH Group.
Illustration: Thida Mat Khiewluang
Review: Lak Nara Phang Peang Chan
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