Chularat Hospital Public Company Limited CHG Presentation for 2Q2017 - - PowerPoint PPT Presentation

Chularat Hospital Public Company Limited

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CHG Presentation for 2Q2017

Agenda

Company Overview Business Highlights Financial Highlights Future Projects

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241 139 202 60 30 36 Chularat 3 Hos. Chularat 9 Hos. Chularat 11 Hos. IPD Beds OPD Rooms

(Million Baht) 2012 2013 2014 2015 2016 Revenue 1,874 2,255 2,715 3,155 3,637 Net Profits 335 414 481 538 565 PPE 759 1,081 1,557 1,987 2,936 Total Assets 1,549 2,994 3,265 3,560 4,518 Total Equity 1,126 2,639 2,804 2,969 3,224

Profile Summary

Service Potential

+Chularat 1 +Chularat 2 +Chularat 4 +Chularat 5 +Chularat 7 +Chularat 8 +Chularat 12 +Cholvaej +Chularat 304 Inter +Chularat Rong Kluea +Chularat Rayong Remark : CH-1, CH-5, Cholvaej are small size hospitals (< 30 beds)

Financial Highlights

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Panyapol Group Others Plussind Group

Shareholding & Business Structure

20% 40%

Convenience Hospital Bang Pakong Hospital Thai Amdon Chularat Arkanay Hospital Chularat Hospital Plc.

Subsidiaries

Cholvaej Hospital

40%

Chularat Rayong Hospital Ruampat Chachoengsao Hospital

Business Highlights

• Company

: Chularat Hospital Public Company Limited

• Established

: 1986 (2529 BE), by Plussind family

• Business

: Private Hospital (7 hospitals & 7 clinics)

• Key Location

: Samut Prakarn /Chachoengsao/Chonburi/Rayong

• No. of Beds

: 582

• OPD Room

: 126 rooms

• No. of Doctor

: 570

• Key Services

: - Heart Center

• Stroke Center
• NICU (Neonatal Intensive Care Unit)
• Hand & Microsurgery

Service area

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 IPO listing in Stock Exchange of Thailand (16 May 2013)  Acquire land in Prachinburi province  Set up “Integrated heart center” at CH-3  Set up “HIFU cancer center” at CH-9  Acquire more land for expansion projects  Set up “Open Heart Surgery”  Apply Digital Radiography system  Acquire land for expansion (CH-11)  Relocation expansion (CH-3)  Submitted filing to SEC to listing in Stock Exchange  Invest in medical device supply company  Operate professional nursing assistant school 2007-2010

2012

2013

2014

• Joint Commission International : JCI [CH-3]

2013

• Hospital Accreditation (HA) Level 3 [CH-11]

2012

• Hospital Accreditation (HA) Level 3 [CH-3]

2011

• Platinum Award from AIA [CH-3]
• Taiyo Award from Tokio Marine [CH-11]

2010

• Best Improvement Award2010 from AZAY [CH-9]

2009

• Hospital Accreditation (HA) Level 2 [All Hospitals]

Awards 5

2014

Key Milestones 2015

 Set up “Prostate cancer clinic” at CH-3  Acquire “Cholvaej hospital” in Chonburi  JCI accredited for CH-3  Open Chularat 304 inter clinic in Prachinburi province  Open Chularat RongKleua clinic in Sa Kaeo province

2016

 Acquire “Ruampat Rayong Hospital” in Rayong

Chularat 3 Hospital : JCI Accredited

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Board of Directors

• Mr. Kriengsak Plussind

Chairman of the Board

• Dr. Kumpol Plussind

Managing Director

• Mr. Apirum Panyapol

Director

• Dr. Wichit Sirithadthamrong

Director

• Dr. Suchai Laoveerawat

Director

• Mrs. Kobkul Panyapol

Director

• Mr. Yanyong Amornphithankkul

Director Miss Kannikar Plussind Director

• Mr. Manit Jeeradit

Independent Director & Chairman of Audit Commitee

• Mr. Chayawat Phisetsit

Independent Director & Audit Commitee

• Mr. Somyos Yanubon

Independent Director & Audit Commitee

• Dr. Pinit Kullavanijaya

Independent Director

“BODs of CHG assembling specialists in medical services with specialists in finance and business management”

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Key Management Team

• Dr. Kumpol

Plussind

Managing Director

• Dr. Chutima

Pinjaroen

Deputy Managing Director & Hospital Director of CH-11

• Dr. Yudthana

Sanguansakdikosol

Deputy Managing Director & Hospital Director of CH-9

• Dr. Rungarun

Santhadkolkarn

Hospital Director of CH-3

• Ms. Wandee

Pisanuvanavech

Deputy Managing Director (Finance & Accounting)

• Mr. Suppachoke

Rojcheewin

Finance & Accounting Manager

“The team has been successfully managed several medical service businesses with over 25 years of proven track record.”

• Dr. Suchai

Laoweerawat

Hospital Director of CH-1,CH-5

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Corporate Structure

Chularat Hospital Plc Convenience Hospital Co.,Ltd. Bang Pakong Vejchakij Co.,Ltd. Thai Amdon Co.,Ltd. Chularat Arkanay Co.,Ltd. Cholvaej Hospital Co.,Ltd.

Imports medical devices for Chularat Group

Chularat Hospital Plc. Area Coverage

• Theparak Rd.
• Bang Na Rd.
• Samut Prakarn

Province Established : 1991 Paid-up Capital : 1,100 MB OPD (Room) : 60 IPD (Beds) : 241

Convenience Hospital Co.,Ltd. Area Coverage

• Kingkaew Rd.
• Eastern Bangkok
• Suvarnabhum

Airport Established : 1993 Paid-up Capital : 500 MB OPD (Room) : 30 IPD (Beds) : 139

Area Coverage

• Bang Na Rd.
• Chachoengsao Province
• Chonburi Province
• Rayong province

Established : 1994 Paid-up Capital : 810.75 MB OPD (Room) : 36 IPD (Beds) : 202

Bang Pakong Vejchakij Co.,Ltd. Update : 2016

100% 100% 100% 70% 96.38% Sattayabutr Inter Co.,Ltd. 100% Ruampat Chachoengsao Hospital Co.,Ltd. 64.58% Chularat Phraeksa Hospital Co.,Ltd. 100%

Branch Type Year Established OPD Rooms IPD Beds

Chularat 1 (CH1) Hospital 1986 5 26 Chularat 2 (CH2) Clinic 1990 3

• Chularat 3 (CH3)

Hospital 1991 44 189 Chularat 4 (CH4) Clinic 1993 3

• Chularat 5 (CH5)

Hospital 1994 5 26 Convenience Hospital Co.,Ltd. Chularat 7 (CH7) Clinic 1993 1

• Chularat 8 (CH8)

Clinic 1993 2

• Chularat 9 (CH9)

Hospital 1993 27 139 Bang Pakong Vejchakij Co.,Ltd. Chularat 11 (CH11) Hospital 1994 21 141 Chularat 12 (CH12) Clinic 2012 2

• Cholvaej

Hospital 2014 3 11 Chularat 304 Inter Clinic 2014 5

• Chularat Rong Kluea

Clinic 2015

• Chularat Rayong

Hospital 2016 5 50 Total 126 582

Branch Summary

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Company Overview Business Highlights Financial Highlights Future Projects

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Agenda

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Health Care Industry

Health Care Service System in Thailand

Health service infrastructure Government health services Private medical sector Non-profit health services Health service systems Cash & Insurance Premium Mid-tier Managed care schemes

Social Security (SS) Civil Servants Security National Health Security (NHS)

11.7 M 48.2 M 4.83 M Thailand population = 67.2 million

• ---Medical Services----------------------------------------------------------------------------------------
• General medicine with various subspecialties
• Expertise : Heart center, Stroke center, NICU, Hand microsurgery

CUSTOMER GROUPING

• --Alternative Services-------------------------------------------------------------------------------------
• Laser & Beauty Center
• Spa & Thai traditional medicine
• Chinese acupuncture
• Medical equipment supply
• Professional nursing assistant training

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A-Class

• Cash
• Corporate contracts & Insurance
• Motor Accident Vehicle Protection Act (1992)
• Workers Compensation Fund

Social Welfare

• Social Security System
• National Health Security System

Business overview

Cash Self pay patients in nearby area Cash, based on actual medical treatment Corporate Contract Companies / plants in nearby area, and insurance company having medical service contract with Chularat Group Credit, based on actual medical treatment, capped by each contract MAVP Act 1992 Motor vehicle accident patients Credit, based on actual medical treatment, capped 50,000 Baht / case Workers Compensation Fund (WCF) Labors / officers of companies or plants in nearby area facing accident caused by working environment Credit, based on actual medical treatment, capped 300,000 Baht / case Social Security system (SSS) Labors / employees of companies or plants in nearby area A) Fixed Payment : Advance payment, based on number of registered SS members B) National Statistics Base : Credit, based

• n comparable national statistics

C) Per Special Medical Services : Credit, based on actual medical treatment, under treatment rate specified by SSO National Health Security System (NHSS) Non-SS members (CHG dose not participate in “30 Baht for universal coverage project” Credit, based on actual medical treatment, under treatment rate specified by NHSO 14

Customer Grouping

A-Class

Social Welfare

Customer Group Target Customers Payment Basis

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Competitive Advantages

Customer Diversification

Cost Control Service Quality

• HA level 3 and JCI approval
• Diagnosis & treatment quality

accredited by both private and public sectors

• Increasing specialized clinics to

accommodate A-Class

• In 2016 : A-Class 55%

Social Welfare 45%

• Short-term Target : A-Class > 60%
• Long-term Target : A-Class > 70%
• Effective Cost control with

maintained quality

• Pooling E-procurement with

strategic alliances

• Cost & facilities sharing among

the group. Logistic Network

CSR Potential Location

• Industrial area with high growth

community, and closed to international airport

• Nearby highways
• 7 Hospitals and 7 clinics expanding in

strategic locations for patient transfer & personnel rotation among the group

• Raise brand-awareness through CSR

to strengthen the relationship with the communities and become the communities’ hospital

1 3 2 4 6 5

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Areas of Expertise

Heart Center

Started up Open-heart surgery in 2010, and Cardiac catheterization in Jan.2013 Qualified to be a referral center by National Health Security .

Stroke Center NICU

Hand & Microsurgery Neonatal Intensive Care Unit take the best care of underweight new born babies. Qualified to be a referral center by National Health Security. More than 10 years of experience with underweight babies. Microsurgery (operation using microscope) 16 years of experience and well known, many fingers had been reconstructed. Fingers & Hand injury are always the leading cause of workers’ accident. Started up Stroke center in May 2011. Certified by Thai Neurological institute and qualified to be a referral center.

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Excellent Heart Center

Cardiac cath lab 24 hr. with professional team Cardiac CT scan Evaluate the cardiac risks Cardiac MRI scan Evaluate the complex heart

Enhanced External Counter Pulsation

Innovation for inoperable heart patients

Cardiac Electrophysiology Lab Ablation for cardiac arrhythmias

Coronary Artery Bypass Grafting

24 hr. with professional team

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Excellent Cancer Center

Utilization Benchmark

19 72.5% 70.9% 69.0% 70.3% 70.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

2012 2013 2014 2015 2016

72.7% 68.5% 71.0% 67.6% 71.9% 68.4% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 84.0% 76.0% 81.7% 86.7% 87.8% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

2012 2013 2014 2015 2016

89.0% 82.3% 70.8% 66.5% 59.4% 64.3% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17

OPD : Utilization Rate IPD : Occupancy Rate

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Healthcare Industry Trend

17.9 11.3 9.4 9.1 5.4 4.0 1.8 2.3 2.9 3.0 3.9 3.9 4.7 5.4 6.6 10.2

• 2.0

4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0

USA Germary UK Australia China India Myanmar Brunei Laos Indonesia Thailand Malaysia Singapore Cambodia Vietnam World

AEC : ASEAN Economic Community

• Aging society plays more important role in Thailand,

Leading to higher demand for medical services.

• %Healthcare expenses per GDP of Thailand and

ASEAN countries are significantly below global average, implying potential room for future increase.

• AEC will be coming in 2015, which the member

include Thailand and other 9 members of ASEAN. The AEC is expected to propel Thai medical service industry because of comparatively high service quality, with reasonable service charge. Aging Demographics

%Healthcare Expenses per GDP 2012 by WHO

41 38 35 32 29 26 49 51 52 53 52 51 10 11 13 15 19 23

• 10

20 30 40 50 60 70 80 90 100

2001 2006 2011 2016F 2021F 2026F

60 25 59 0 24

Company Overview Business Highlights Financial Highlights Future Projects

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Agenda

Financial Performance Vs Patient Growth

Revenue Net Profits Patients

OPD (Head) IPD (Beds-Day) 1.352 M 1.464 M

“The continuous growth of revenue and profits from 2010 to 2016 is in line with the growth of number of OPD patients and IPD patients.”

90,070 104,569

1.526 M

100,678

1.634 M

112,067

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122,756

1.815 M 1.253 M

87,812

1,417 MB 1,863 MB 2,221 MB 2,672 MB 3,155 MB 1,229 MB 171 MB 335 MB 414 MB 481 MB 538 MB 119 MB 3,637 MB 565 MB

140,821

2.153 M

9% 36% 30% 25%

7% 22%

13% 23%

8% 23%

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1% 24%

A-Class OPD A-Class IPD SSO NHSO A-Class OPD A-Class IPD SSO NHSO A-Class OPD A-Class IPD SSO NHSO

• Hospital service revenues increased significantly from 2012 to 2016 with CAGR of 18.20%
• Revenue from A-Class still dominated revenues (>50%) from other sources.

( 55 : 45)

2012

( 51 : 49 )

2013

A-Class IPD A-Class OPD SSO NHSO

1,863 MB

2,221 MB

2,672 MB 3,155 MB

3,637 MB

( 51 : 49)

2014

A-Class IPD A-Class OPD SSO NHSO

Revenue Breakdown 2012-2016

Service Revenue Structure

( 51 : 49)

2015

( 55 : 45)

2016

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Revenue Breakdown

Service Revenue Structure

5% 39% 31% 25% 10% 38% 29% 23%

876 MB

890 MB

( 56 : 44 )

2Q17

( 52 : 48)

2Q16 Growth

• 47.78 %

+ 3.72 % + 9.92 % + 10.08 %

205 225 249 274 332 345 90 46

• 200

400 600 800 1,000

2Q16 2Q17

NHSO SSO A-Class : OPD A-Class : IPD

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Revenue Breakdown

Service Revenue Structure

5% 40% 30% 25% 11% 36% 29% 24%

1,762 MB

1,827 MB

( 55 : 45 )

6M17

( 53 : 47)

6M16 Growth

• 47.92 %

+ 13.32 % + 8.99 % + 6.83 %

420 449 503 548 642 728 197 102

• 500

1,000 1,500 2,000

6M16 6M17

NHSO SSO A-Class : OPD A-Class : IPD

Fixed Payment

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Revenue from Social Security System

Revenue Structure = (1) + (2) + (3) Statistics Per Special Medical Services Basic Payment (Fixed) 1,500 Bt/head/yr IPD OPD 10,000 Bt/RW (avg.) Average : Nationwide 447 Bt/head/yr

OPD only 26 Chronic Diseases All IPD cases Classified by DRG AdjRW ≥ 2 AdjRW < 2 (90%) (10%)

1 2 3

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Revenue from Social Security System

• -Registered SS Member (Average) -- Unit : Head
• Number of insured persons = 11.7 million (Jan.2017, SSO) by law article #33 [obligation]

and #39 [voluntary]

• Unemployment rate = 1.0% (Jan.2017, Labor Market Research Division)

252,903 274,399 287,148 308,005 326,783 345,477 398,950 400,708

2010 2011 2012 2013 2014 2015 2016 Current (01/08/2017)

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Revenue from Social Security System

287,146 308,005 326,783 345,775 396,676 396,280 399,267

2012 2013 2014 2015 2016 2Q16 2Q17

819 928 1,085 1,132 1,315 332 345

2012 2013 2014 2015 2016 2Q16 2Q17

Unit : Head Unit : Million Baht

• -Registered SS Member (Average) ----------------------
• -Revenue from SSS -------------------------------------------

Revenue from A-class Patients

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IPD : Admission number (AN) IPD : Revenue (MB) OPD : Visiting number (VN) OPD : Revenue (MB)

29,826 31,459 34,412 39,861 50,268 11,032 11,728

2012 2013 2014 2015 2016 2Q16 2Q17

453 489 611 744 902 205 225

2012 2013 2014 2015 2016 2Q15 2Q17

512,096 520,015 548,550 621,969 743,666 177,245 189,657

2012 2013 2014 2015 2016 2Q16 2Q17

577 645 752 873 1,093 249 274

2012 2013 2014 2015 2016 2Q16 2Q17

Profitability Remark : Gross profits is based on hospital service revenue, net profits is based on total revenue

30 336 414 481 538 565 116 119

2012 2013 2014 2015 2016 2Q16 2Q17

665 775 916 1,073 1,168 256 266

2012 2013 2014 2015 2016 2Q16 2Q17

• - Gross Profits----------------------------------------------------
• - Gross Profit Margin------------------------------------------
• - Net Profits------------------------------------------------------
• - Net Profit Margin---------------------------------------------

35.7% 34.9% 34.3% 34.0% 32.1% 29.2% 29.9%

2012 2013 2014 2015 2016 2Q16 2Q17

17.9% 18.7% 17.7% 16.9% 15.4% 13.1% 13.2%

2012 2013 2014 2015 2016 2Q16 2Q17

Asset Profile & Capital Profile

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• - ROA ----------------------------------------------------------------
• - ROE ----------------------------------------------------------------

24.0% 23.0% 19.2% 19.7% 17.2% 15.7% 0.0% 10.0% 20.0% 30.0% 40.0%

2012 2013 2014 2015 2016 2Q17

32.3% 22.0% 17.1% 18.7% 18.5% 17.1% 0.0% 10.0% 20.0% 30.0% 40.0%

2012 2013 2014 2015 2016 2Q17

• - Capital Structure ----------------------------------------------

2Q17 Equity = 3,416 MB, Debt = 1,370 MB

• - Asset Structure --------------------------------------------------

2Q17 Asset = 4,786 MB 8% 19% 68% 5%

Cash

Account Receivable & Accrued Revenue

PP&E Others Account Receivable & Accrued Revenue

2Q17 5% 9% 15% 23% 24% 24%

Short term loan AP Other Debt Common Share Premium Share RE

2Q17

DE 0.40

Company Overview Business Highlights Financial Highlights Future Projects

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Agenda

Chularat 304 Inter, Chularat Rong Kluea Clinic, Chularat Rayong Hospital and Ruampat Chachoengsao Hospital

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Ruampat Chachoengsao

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New hospital : Chularat 304 International hospital

Project Title New Hospital Location 304-Prachinburi Investment 375 MB Development 2014-2017 Service Area Apprx 7,000 sq.m. Capacity

OPD : 15 Rooms IPD : 100 Beds

Expansion project

Investment 200 MB Development 2014 - 2017 Service area 5,600 sq.m. New capacity OPD : 5 rooms IPD : 59 beds Key service Heart center Brain center Gastrointestinal 35

Expansion of Chularat Cholvaej hospital

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Chularat Rayong Hospital in Rayong province

Ruampat Rayong Hospital (OPD 5, IPD 50) has been acquired by purchase 100% shares at 115 MB

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Ruampat Chachoengsao Hospital in Chachoengsao province

Project Title New Hospital Location Chachoengsao Investment 600 MB Development 2016-2018 Service Area Apprx 7,000 sq.m. Capacity

OPD : 20 Rooms IPD : 100 Beds

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Appendix : Abbreviation Table

AdjRW Adjusted Relative Weight CAGR Compound Annual Growth Rate CH Chularat HA Hospital Accreditation IPD In-Patient Department MAVP Act 1992 Motor Accident Vehicle Protection Act 1992 NHSS National Health Security System NHSO National Health Security Office NICU Neonatal Intensive Care Unit OPD Out-Patient Department Registered SS Member Registered Social Security Member ROA Return on Assets ROE Return on Equity SSS Social Security System SSO Social Security Office WCF Working Compensation Fund