Recently looking at the Thai stock market, I found that the hospital sector really deserves attention. I'm not saying you should rush in immediately, but these kinds of stocks have certain characteristics that other industries don't.

First, let's talk about why hospital stocks are so stable. Think about it—regardless of whether the economy is good or bad, people get sick and need to see a doctor. That’s why they are called defensive stocks. During market crashes, other stocks might halve in value, but hospital stocks remain steady. Conversely, in a bull market, their gains aren’t particularly explosive, but they are stable. And once a hospital is built, the fixed assets invested in start generating cash flow continuously, which I find especially attractive.

Recently, I studied seven major listed hospital companies in Thailand and want to share my insights. First is BDMS (กรุงเทพดุสิตเวชการ), the largest company with a market cap of 31.9 billion Thai Baht, and a stock price of 20 baht. They operate hospitals domestically and internationally, including projects in Myanmar and Mongolia. The PE ratio is 19.5, and ROE reaches 16.8%. If you are optimistic about medical tourism and regional expansion, this might be the top choice.

BH (โรงพยาบาลบำรุงราษฎร์) has a completely different profile. Their proportion of foreign patients is very high, meaning their income is more stable but also more dependent on the international economic situation. The stock price is 167.5 baht, with an ROE of 31.9%, which is top-tier among hospital stocks. The PE is only 19.3, so it doesn’t look expensive.

BCH (บางกอก เชน ฮอสปิทอล) is the largest in market value in this sector, but the stock price is only 10.2 baht, making it more affordable for retail investors. They have 15 hospitals and 2 clinics, mainly serving local patients and social security users. This is suitable for investors wanting to enter at a lower price.

RAM (โรงพยาบาลรามคำแหง) is somewhat special, focusing on high-end specialized treatment. Its PE is as high as 33, but ROE is only 3.38%. This indicates that the market has high expectations for them, but current profitability is average. If you believe they can improve operations, it might be worth considering.

VIBHA (โรงพยาบาลวิภาวดี), CHG (โรงพยาบาลจุฬารัตน์), and PR9 (โรงพยาบาลพระรามเก้า) are three smaller-scale companies, with stock prices between 1 and 2 baht. Their common point is active expansion plans, including increasing beds and building new hospitals. VIBHA’s analyst target price is 2.74 baht, suggesting room for growth.

When choosing all hospital stocks, I think the most important thing is to clarify three points. First, which patient group does this hospital mainly serve? Some focus on foreign tourists, some on the local market, and some even in rural areas. This determines their revenue stability and growth potential. Second, look at the combination of PE and ROE. Low PE but also low ROE might indicate problems. High PE and high ROE are worth researching. Third, understand their expansion plans. Building new hospitals may initially drag down profits, but in the long run, it’s beneficial.

My personal observation is that the biggest opportunities in this sector come from aging populations and growth in medical tourism. The Thai government is promoting the Medical Hub strategy, which is a long-term positive for hospital stocks. Meanwhile, post-COVID, the demand for medical services has rebounded significantly.

If your investment style is conservative and you want stable cash flow, BDMS and BH are the blue-chip choices. If you believe Thailand’s healthcare industry still has great growth potential and are willing to accept higher volatility, smaller hospital stocks like VIBHA or PR9 might offer more opportunities. In short, the hospital sector is worth a place in a long-term investment portfolio. The key is to choose the right one for yourself and hold patiently.