Investor Presentation Sep 2019 Vision & Milestones To be a - - PowerPoint PPT Presentation

Investor Presentation

Sep 2019

Vision & Milestones

“To be a trusted hospital and medical service network delivering high quality service through the latest innovations that provides the general public an easy access to its service”

1977 Thonburi Hospital started

• peration

1991 Invested in Ubonrak Hospital 1993 Opened Thonburi 2 Hospital 1994 Registered as a public company limited 1996 Invested in Sirivej Hospital 1997 Invested in Dental Siam 2003 Invested in Rajyindee Hospital 2009 Invested in Modular Software Expertise 2011 PPP agreement to provide hospital management for Phuket Provincial Hospital 2012 PPP agreement to provide hospital management for Pattaya City Hospital 2014 Invested in Thonburi Hospital Heart centers and Premier Home Health Care 2016 Restructure and prepare for IPO Signed JV for Welly Hospital in China

Registered Capital (THB mn) 20 60 300 600 849

Signed JV for Ar Yu International Hospital in Myanmar 2017 1976 1980 1991 2013 2017

2

2016

764

2015 PPP agreement for Koh Lan CMU 2018 Grand opening

• f Thonburi

Bamrungmuang Hospital and Ar Yu Hospital Acquired shares for Thonburi Thungsong Hospital 2019

THG Businesses

Hospital Business Healthcare Solution Provider Other business

2018 Revenue: THB 6,579 mm (92.7%) 2018 Revenue: THB 492 mm (6.9%) 2018 Revenue: THB 23 mm (0.3%) Domestic / International Hospital

• 7 Hospitals in Thailand
• 2 Hospitals overseas

Management Service

• 2 Hospitals and 1 Medical Center in

Thailand

• MOU for consultancy in Asia

Excellent Center Management Service

• 3 Heart Centers under management

Step-Down Care

• A rehabilitation center for patients

who do not need close watch from doctors

• Low-tone care for OPD patients

Home Healthcare

• Medication services to patient’s

home ex. check up, treatment, rehabilitation Senior living

• Jin Wellbeing County, mixed-use

development to provide services needed by senior

• Thonburi Health Village, to serve

various segments Dental Supplies Retailer & Drug Stores

• 10 Drug stores
• Exclusive distributor for dental

supplies: 30 brands Software Development

• Develop software to support internal

departments and connect with other networks such as Social Security Office, National Health Security Office, The Comptroller’s General Department Project Development for Healthcare & Medical Services

• Land Pipeline: 1,931 Rai
• Book Value: THB 1,811 mm

3

• Higher margin from

asset-light model

Welly Hospital Ar Yu Hospital 2018 2019

Jin Wellbeing County

Hospital & excellence center management

Growth prospect

Jin Wellbeing County + Thonburi Health Village

Hospital & excellence center management Thonburi Bamrungmuang Domestic hospitals Domestic hospitals

• Strong core business

with stable growth

• More Jin’s unit transfer expected after starting in

4Q18

• Expected growth from new opportunities

both domestically and internationally

• Started operation on 24 January 2019
• Ready to support international patients

catching medical tourism trend

• Organic growth from volume, price and medical

intensity, with capacity expansion

• Potential growth from Thonburi Thungsong

Hospital, expected to operate in 2H19

• Potential growth from Thonburi Burana

Hospital, low-tone care in Jin Wellbeing County facilities

• Ramping up after grand opening
• Less shared loss due to more

patients volume

• Soft launch in 3Q18 and grand
• pening in March 19 with loss shared

to THG in first year

• Expected EBITDA breakeven in 2020

Hospital Business - overall

5 Key Excellence Centers

Heart Center Women’s Center Gastrointestinal and Liver Center Orthopedic Center Neuroscience Center Hospital Accreditation

• f Thailand (HA)

ISO

Hospital Business – Hospitals in Thailand

• THG has a strong foothold in Bangkok with flagship brand, Thonburi Hospital, trusted by patients for 40 years.
• Upcountry hospitals are in strategic locations with high potential for patient referrals to hospitals in Bangkok.
• This core business has provided stable growth and become a foundation to expand to related business.

6

Location: Bangkok Registered beds: 435 Location: Bangkok Registered beds: 95 Location: Chantaburi Registered beds: 90 Location: Ubonratchathani Registered beds: 100 Location: Nakorn Srithammarat Registered beds: 50 (initial) Location: Songkhla Registered beds: 196

Location: Bangkok Registered beds: 47 (initial)

Hospital Business – Positioning benchmark

Medical sophistication Price per disease

Secondary Tertiary Super tertiary

High end High end, international focused Prestigious public medical schools High end, international focused High end, international focused Mid to high end hospitals Mid to lower end hospitals Lower end, SSO Thonburi Hospital Thonburi 2 Hospital

THG has capability and capacity for sophisticated medical services but at more affordable price.

7

Hospital Business – Thonburi and Thonburi 2 Hospital

Strategy

• OPD
• Increase and develop excellence centers

to meet demand of target group

• Thonburi 2 aims to increase capability to

provide tertiary care services.

• Space management for patients’

convenience and satisfaction

• Expand customer base with continuous

marketing activities with insurance, corporate and foreign customers.

• IPD
• OPD building expansion can draw more

patients and potentially turn to IPD admission.

• Step-down care can help free up beds to

support more complexed cases.

• With our direction to provide more value

at affordable price, potential revenue increase should be mainly from more sophisticated treatments.

Thonburi Expansion Plan Thonburi 2 Expansion Plan

Details Area (sq.m.) Capacity Completion Year Total Investment 10 fl car park building 8,820 150 cars 2020 120MB 8 fl OPD building 14,900 50 OPD Rooms 2020 740MB Details Area (sq.m.) Capacity Completion Year Total Investment 3 fl IPD & OPD building 12,000 15 OPD Rooms/ 52 Beds 2020 435MB

8

Thonburi Bamrungmuang Hospital

• Grand opening in Jan 19, with dental, Premium Checkup and Diabetic Wound Care centers
• IVF has just started in May 2019.
• OPD pay per bill approx. THB7,000
• IPD pay per bed day approx. THB40,000

9

Diabetic Wound Care Center Digital Dental Center IVF Reproductive Center

Thonburi Thungsong Hospital Project

10 Details Location Tungson-Wiangsa Highway, Nakorn Sri Tammarat Positioning Secondary care Target Elderly, middle class, insurance client, ER patients Registered beds 50 beds (initial) Expected operations 4Q2019 As of 7 November 2018, THG holds 51.12% directly and 5.31% indirectly via Rajyindee Hospital. Total shares held are 56.43% of THB600mn registered capital of Thanarad Thungsong. Total investment is THB307mn.

Hospital Business – International hospitals

Strategy for investment in international market

• Selective increase in market with promising growth potential
• Leverage on strong partners
• Start from initial partnership, small investment or management contract until proven success

Welly hospital Location: Wei Hai, Shandong region Project: 130-available-bed private hospital in an area mostly populated by state hospital Grand opening in 4Q17 Partner: THG 58%, WEGO 42% Leading manufacturer of medical devices in China Ar Yu International Hospital Location: Yangon, Myanmar Project: 200-bed private hospital which is the first with international standard Partners: GMP 50%, THG 40%, AMS 10%

• Ga Mone Pwint: Leader in brand

developer, property & real estate, hotel, retail, and trading business in Myanmar

• Aryu Ananta Medical Services: A group
• f leading local doctors

Asia Continent

11

• Cardio, Wellness and Ortho are popular centers

with experienced and well-known medical team.

• Thai doctors starts to visit patients in Myanmar.
• Average OPD patient/day > 200 patients
• IPD patient occupancy 35-40 beds

Ar Yu International Hospital

12

6M18 6M19 6M18 6M19 6M18 6M19 OPD Revenue IPD Revenue

Welly Hospital

• The hospital is ramping up patient volume and revenue, aiming for EBITDA break even in 2019.
• OPD patients are approx. 200/day and IPD are approx. 70/day.
• Welly Hospital continues to develop service standard with expertise, knowledge sharing and service

training from THG. Revenue OPD patients IPD bed days

13

Domestic

‘Asset-light model’

• No CAPEX – High ROE/ROA
• Stable revenue stream
• THG responsible for cost management
• Current net profit margin >10%
• THG diversifies into consulting & management services by establishing management team and providing efficient

medical services for public hospitals.

• THG is the first private hospital to enter into Public – Private Co-operation agreement with Ministry of Interior and

Ministry of Public Health, aiming to bridge the gap between public and private hospitals’ healthcare standards. Locations

• Pattaya City Hospital
• Central Medical Unit (CMU) (Kohlan)
• Phuket Provincial Hospital

Hospital Business – Hospital Management

International

Strategy

• Strategic Increase – Using asset-light model that enhance ROE and ROA
• Focus on Asian region – markets in CLMV
• Tap into markets where level of medical sophistication offered by local hospitals are insufficient for local demand
• Cater services to suit requirements: e.g. consultancy, staff training, comprehensive study, feasibility study

Revenue from hospital management (MB)

Overseas contracts generated growth in 2017 and they expired causing decrease in 2018.

14

378 440 503 598 494 2014 2015 2016 2017 2018

0.4 58 130 216 276 2014 2015 2016 2017 2018

Heart Center

Hospital Business – Excellence Center Mgt

Bangplee Hospital* Phatra Hospital Thonburi 2 Patalung Hospital Type of Hospital

• Public Hospital
• Private Hospital
• Private Hospital
• Public Hospital

Medical Equipment Investment

• THG’s Investment
• Co Investment
• THG’s Investment
• THG’s Investment

Revenue from heart center (MB) 2018 growth was mainly from new sites.

THG serves both private and public hospitals by providing highly skilled cardiologists, medical staffs and advanced machines which will allow heart patients to get access to high quality care at lower price.

15

* Contract at Bangplee expired at the end of 2018

Healthcare Solutions Provider Business

Home healthcare Dental supplies & drug stores Senior care and senior living

• Basic treatment: medication dispensing and delivery, health evaluation, vaccination,

counseling

• Skilled nurse service: wound care, post-surgery care, pain management, fall prevention
• Physical therapy service: for orthopedic patients, for neurological disorders, cardio-

pulmonary rehab

• Service for new mom: ultrasound for blocked milk ducts
• Standard hospital-accredited housekeeping (Premiere Healthy Clean): allergy and dust

mites specialists Healthcare mixed use development comprises of

• Active Living, with medical staff, 24-hour emergency aid and Centralized

Health Monitor System

• Thonburi Burana Hospital low-tone care for elderly who need special care
• Wellness Center for physical rehabilitation and health activities
• Dental Siam: one-stop service dental supplies shop
• Apex: drug stores with 10 branches in shopping malls

16

Jin Wellbeing County

• Key differentiation is comprehensive medical service with expertise from Thonburi Hospital.
• With growing senior population in Thailand, the project can become a big community with potential of

recurring income from residents.

• Comprising active living, rehab hospital and wellness center

17

• Best Senior Living Development
• Highly Commended for Best

Universal Design Development from Property Guru Thailand Property Award 2018

Jin Wellbeing County

• 494 units
• One-bedroom and two-bedroom

at 85,000–120,000 baht/m2

• 43 and 63 Sq.M. at THB4-6mn

Jin Residence Thonburi Burana Hospital

Low-tone hospital for elderly who need special care, such as chronic patients, Alzheimer etc.

Jin Wellness Institute

Wellness center to take care of residents physically, mentally and emotionally

Jin Wellbeing County - progress

Cluster 1 Cluster 2 Thonburi Burana Hospital Jin Wellness Institute

2019 target

200 unit transfer 148 units sold 87 units transferred since 4Q18 61 units backlog

As of July 2019

Jin Wellbeing County – Business model

20

Integrated senior solutions and community

Services

• Freehold
• Yield guaranteed

5% for 3 years

• 30-year leasehold
• Active living rental
• Thonburi Burana Hospital
• Jin Wellness
• Home Health Service

(daily/ weekly/ monthly) Assets

Thonburi Senior Home Jin Wellbeing County Thonburi Health Village Medical services Advanced Standard Service technology Advanced Standard Target group Medium - high Medium Design for elderly/patients Well supported Well supported Location North of Bangkok West of Bangkok Price per square meter 85,000 -120,000 baht 60,000 baht Price per unit

• Approx. 4-6 mn baht

(43 and 63 Sq.M.) 1.9 mn baht (32 Sq.M.)

Thonburi Senior Home – Comparison

21

Thonburi Health Village – Pracha Uthit

Swimming pool & Wellness Center

Investment value THB700mn Land area 8 rai (4 rai for 1st phase) Number of units 412 GFA 26,000 Sq.M SFA 13,824 Sq.M. Expected date of completion End of 2019

22

Other supporting business

Software Development Project development for healthcare/ medical service

Thonburi Realty Development Company Ltd. and Rajthanee Realty Company Ltd. develop projects related to medication for future project under group, for example senior living home and step-down care Company Location Area Book value Thonburi Realty Development Co., Ltd. Ratchaburi 1,550 rai THB 344.4 mn Rajthanee Realty Co., Ltd. Surat-thani (Koh Samui) 381 rai THB 1,467.3 mn Modular Software Expertise Co., Ltd. (MSE), one of Thailand's leading Hospital Information System (HIS) provider with experienced IT team and healthcare management professionals

• Hospital Information Management System (HIMS)
• Goods Management and Distribution System (GMDS)
• Retail Store Information Management System (RIMS)
• Car Park Management System (CPMS)

within THG Group Outside THG

Customer Group 23

Project timeline expectation

1Q19 2Q19 3Q19 4Q19 2020 Hospital expansion Construction Capacity increase Welly Hospital Ar Yu International Hospital EBITDA breakeven Thonburi Bamrungmuang Hospital Jin Wellbeing County Thonburi Health Village Ramp up EBITDA breakeven Grand Opening EBITDA breakeven Unit transfer and revenue recognition Construction Unit transfer and revenue recognition EBITDA breakeven Grand Opening

Investment highlights

25

Investment highlights

Strong positioning in Bangkok with diversification to strategic locations upcountry Extensive Medical Resources and Network Diversify revenue mix Strong growth potential

• Well trusted due to its 40-year-old brand and

track record of quality medical services

• Best value in providing sophisticated medical

services at affordable price

• TH1 proximity to top medical school provides

benefit to retain specialized doctors and nurses

• 17 Network hospitals allow THG to capture benefits

from cost control and client referral

• Hospital business maintains a strong core, plus

future revenue from new businesses and from

• verseas.
• Expand into full-coverage medical businesses

with innovative healthcare services

• Early mover towards integrated healthcare

provider, including wellness and aged care

• Jin Wellbeing County and Thonburi Bumrung

Muang projects as brown field for growth drivers

26

Financial information

27

2 8 7 3 4 101 97 211 218 258 1,572 1,749 1,665 1,651 1,747 2Q18 3Q18 4Q18 1Q19 2Q19 Others Healthcare solution provider Medical service

2Q19 Financial Performance

Total revenue (mn THB)

+20% YoY

Medical service +11% YoY

• Revenue growth in 2Q19 was mainly from sales of Jin Wellbeing County and Thonburi Bamrungmuang

Hospital.

28

1,675 1,854 1,883 1,872 2,009

Hospital business

29

Revenue from domestic hospitals increased from new revenue stream.

• Revenue growth was mainly from

new hospital, Thonburi Bamrungmuang.

• Main existing ones slightly decreased

high base of 2018 with outbreak.

• Thonburi Thungsong plans for
• peration in 4Q19.

+13% YoY +5.5% QoQ

1,384 1,555 1,462 1,486 1,567 2Q18 3Q18 4Q18 1Q19 2Q19

57 72 92 56 70 2Q18 3Q18 4Q18 1Q19 2Q19 126 119 111 109 110 2Q18 3Q18 4Q18 1Q19 2Q19

Hospital Management & Heart Center

30

• 13% YoY -0.9% QoQ
• Revenue dropped YoY because
• verseas contracts ended.
• There are some projects in the

pipeline with clients in SEA.

Revenue from hospital management +23% YoY +25% QoQ Revenue from heart center

• Revenue grew mainly from

Phathalung site.

• Thonburi 2 was approved to

treat referred patients under Universal Health Coverage.

2Q19 Financial Performance

Gross profit (mn THB)

• 19% YoY

EBITDA (mn THB) Net profit-parent (mn THB)

+91% YoY +211% YoY

31

+18% YoY

• ex. special items in 2Q19

+1.4% YoY

• ex. special items in 2Q19

429 517 485 447 348 25.7% 27.9% 25.8% 23.9% 17.3% 2Q18 3Q18 4Q18 1Q19 2Q19 Gross Profit GP Margin 249 300 197 188 476 14.9% 16.2% 10.5% 10.0% 14.6% 2Q18 3Q18 4Q18 1Q19 2Q19 EBITDA EBITDA Margin 249 293 183 2Q18 2Q19 EBITDA net special items 72 96 22 8 224 4.3% 5.2% 1.2% 0.4% 5.8% 2Q18 3Q18 4Q18 1Q19 2Q19 Net Profit -Parent NP Margin 72 73 151 2Q18 2Q19 Net Profit -Parent net special items

Note: Net special items in 2Q19 refer to 1) reserve for employee’s benefits 2) profit from disposal of RJH

2Q19 Operational statistics – TH1, TH2, RYD

Revenue mix – OPD vs IPD Revenue breakdown by payors – 2Q19 OPD utilization IPD utilization

32

46% 45% 44% 45% 47% 54% 55% 56% 55% 53% 2Q18 3Q18 4Q18 1Q19 2Q19 % OPD Revenue % IPD Revenue 75% 18% 7% 0% Self pay Insurance Corporate Others 60% 64% 58% 59% 58% 2Q18 3Q18 4Q18 1Q19 2Q19 61% 72% 66% 66% 60% 2Q18 3Q18 4Q18 1Q19 2Q19

21,259 20,241 19,925 20,316 21,879 2Q18 3Q18 4Q18 1Q19 2Q19 2,452 2,501 2,523 2,546 2,532 2Q18 3Q18 4Q18 1Q19 2Q19 2Q18 3Q18 4Q18 1Q19 2Q19 TH1 TH2 RYD 2Q18 3Q18 4Q18 1Q19 2Q19 TH1 TH2 RYD

Pay per sequence (baht) Pay per bed day (baht) OPD sequence (‘000 sequences) IPD occupancy (‘000 bed days)

33 258

2Q19 Operational statistics – TH1, TH2, RYD

+3.3% YoY +2.9% YoY

• 2.7% YoY
• 5.5% YoY
• Approx. THB3,000 for TH1 and THB1,800-1,900 for RYD and TH2
• Approx. THB21,000 – 25,000 for TH2 and TH1,

and THB14,000 for RYD

278 35 43 257 41 252 38 251 33

18% 23% 59% 28% 20% 52% 2Q19 IBD Interest 2018 IBD Interest

2Q19 Capital management

Gearing ratio Interest coverage ratio (x) Capital structure (mn Baht) Dividend

On 13 Aug 19, BoD approved Interim dividend payment for 1H19 performance

THB 0.10/share XD date 27 Aug 19 Payment date 12 Sep 19

Dividend policy: not less than 40% of net profit

Equity LT loan 2Q19 4Q18 IBD/EBITDA (x) D/E (x)

34

ST Loan

DSCR ratio (x)

3,052 3,144 39

4Q18

7,358 2,789 48

1.0 0.6 1.1 1.1 1.3 3.6 3.2 5.7 7.9 7.0 2016 2017 2018 1Q19 2Q19 5.0 5.3 4.4 2.9 3.8 2016 2017 2018 1Q19 2Q19 1.6 4.4 2.0 1.4 1.5 2016 2017 2018 1Q19 2Q19

CapEx Plan

CapEx (MB) Project 2018 1H2019 (A) 2H2019 (E) 2020 (E) 2021 (E) 4 Yr Thonburi Hospital

• 100
• 850

400 1,350 Thonburi 2 Hospital

• 100
• 340

200 640 Thonburi Bamrungmuang 750 880 170 100 1,900 Jin Wellbeing County 1,000 400 500

• 1,900

Thonburi Health Village 300 50 50 280 680 Total 2,050 1,530 720 1,570 600

Appendix

36

Group structure

Company Structure

Vanasin Family Other shareholders Thonburi Healthcare Group PLC Registered capital THB 849 mn Paid-up capital THB 764 mn

Rajyindee Hospital PLC Ubonrak Hospital

• Co. Ltd.

Uttaradit Thonburi Hospital Co. Ltd. Thonburi Hospital Heart Centers Co. Ltd. Weihai Thonburi Healthcare Investment Co. Ltd. Hospital Business Other related Business Dental Siam Co. Ltd. Modular Software Expertise Co. Ltd. Rajthanee Realty

• Co. Ltd.

Thonburi Wellbeing Co.,Ltd. Thonburi Realty Development Co. Ltd. Other investments

Pre IPO

Shareholding structure

Vanasin family 31.5% Unnanuntana Family 7.7% Meksawan family 4.3% Other shareholders 56.6% Vanasin family 28.3% Unnanuntana Family 6.9% Meksawan family 3.9% Other shareholders 50.9% IPO portion 10.0% 28.3% 71.7% 55.9% 31.9% 34.0% 99.9% 99.9% 58.0% 99.4% 70.0% 100.0% 99.8% 99.9%

Post IPO

Remark: Uttaradit Thonburi Hospital Co., Ltd. is a dormant subsidiary of THG.

Aryu International Health Care Co. Ltd.* 40.0%

37

99.9% Thanarad Thungsong Co. Ltd. 56.4% Sirivej Hospital PLC Thonburi Bamrungmuang Hospital Co. Ltd.

THG’s hospitals

International Upcountry Area

Thonburi (TH1) Thonburi 2 (TH2) Rajyindee Ubonrak Sirivej Welly Ar Yu Year Operated 1977 1993 1995 1991 1992 2016 2018 Location Bangkok Bangkok Songkla Ubon Chantaburi Shandong Yangon Registered bed 435 95 196 100 90 150 200 Available bed 486 339 130 150 Doctors 534 203 140 92 88 72 20 Medical Staff 527 169 230 190 157 108 150 Certification HA HA / ISO HA HA

• N/A

Bangkok Area

38

As of 31 July 2018

For more information, please contact IR department. Email: ariya.si@thg.co.th Tel: +6695-3705728

“Lifetime health guardian for all”

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• uncertainties. These include statements with respect to THG’s corporate plans, strategies and beliefs and other statements that are not historical facts. These statements can be

identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “anticipate”, “intend” , “estimate”, “continue” “plan” or other similar words. The statements are based on the assumptions and beliefs of THG’s management in light of the information currently available to THG. These assumptions involve risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Nothing in this presentation is, or should be relied on as promise or representation of THG as to the future.