Presentation September 2018 Agenda Key developments Project - - PowerPoint PPT Presentation

2Q18 Results Briefing Presentation

September 2018

• Key developments
• Project updates
• Growth outlook
• Financial Information

Agenda

2

Key developments

3

• On 24 August 2018, shareholder meeting approved the purchase
• f land and building at Pracha Uthit Road to develop Thonburi

Health Village Project.

• The project is another senior home with facilities for elderly to

respond to needs of various customer segments.

• During 2Q18, THG have bought shares of Thanarad Thungsong Co.Ltd.,

total of THB97.6mn. As of 30 June 2018, THG holds 31.23% shares in Thanarad Thongsong: 23.54% directly and 7.69% through Rajyindee Hospital PLC.

• BoD meeting of 7/2018 on 5 July 2018 approved the increase of

investment limit from THB240mn to THB360mn in order to maintain investment proportion as Thanarad Thungsong increased its registered capital.

• Up until September 2018, THG purchased more shares and holds

43.37% shares in Thanarad Thungsong.

1,292 1,461 1,369 1,401 1,384

2Q17 3Q17 4Q17 1Q18 2Q18

Hospital business

4

Revenue from domestic hospitals led the growth in medical service business.

+7.1% YoY -1.2% QoQ

• QoQ slightly dropped due to seasonal effect
• TH1 saw stable growth from new excellence

centers and collaboration with insurance company

• TH2 saw double digit growth due to higher

medical sophistication and more specialist

• doctors. It compared to last year when IPD ward

was partly closed for building heart center.

• Capacity expansion projects of TH1 and TH2 are

still on track.

• RYD picked up from last year that had issues on

insurance claim.

1H2017 1H2018 1H2017 1H2018 1H2017 1H2018 OPD Revenue IPD Revenue

Welly Hospital

• The hospital is ramping up patient volume and revenue, aiming for break even in 2019.
• In 2Q18, OPD patients are approx. 200/day and IPD are approx. 60-70/day.
• Welly Hospital continues to develop service standard with expertise, knowledge sharing and service

training from THG. Revenue OPD sequences IPD patient days

5

• In August, the hospital held a blessing ceremony as a

start of hospital operation and preparation for soft launch, which is in 3Q18.

• Plan for 1st phase:

20 OPD rooms, 8 ER beds, 2 ORs and 3 IPD wards

• Key success factors:
• Modern facilities and equipment
• well-known Myanmar medical staff
• Thai hospitality service standard
• patient safety focused and gear for JCI

Ar Yu International Hospital

6 CT Scan Staff training OR

Ar Yu International Hospital

7 EENT Clinic Pediatric Clinic Lift lobby Lobby Escalator

45 50 69 55 57 2Q17 3Q17 4Q17 1Q18 2Q18 157 131 194 138 126 2Q17 3Q17 4Q17 1Q18 2Q18

Hospital Management & Heart Center

8

• 20% YoY -8.7% QoQ
• In 2Q18, revenue from hospital management

dropped YoY and QoQ because some contracts with overseas clients ended in the quarter.

Revenue from hospital management +27% YoY +3.6% QoQ Revenue from heart center

• Revenue from heart center grew YoY because
• f new sites at Thonburi 2 Hospital and

Phatthalung Hospital.

Thonburi Bamrungmuang Medical Center

• Renovation progress is on track.
• Expect to start operation around 4Q18, with dental, IVF and Holistic Diabetes centers
• Expected EBITDA breakeven in 2019
• Potential to contribute revenue of THB 1 – 1.3 bn in 2019 with expected net profit

margin of 15 – 18%

9 Today’s healthcare

• Proactive
• Preventive
• Personalized
• Predictive

Design Renovation progress IVF Dental Holistic Diabetes center To support demand of medical tourism from China Intra-oral scanner and CAD/CAM can better serve patients travelling to Thailand Advanced technology for patients with complication from chronic diabetes.

Jin Wellbeing County - progress

10

Structure 30% Architecture 0% Engineering 15% Exterior 0% Structure 65% Architecture 15% Engineering 20% Exterior 0% Structure 100% Architecture 14% Engineering 20% Exterior 0% Structure 35% Architecture 0% Engineering 15% Exterior 0%

Jin Wellbeing County – Thonburi Burana Hospital

11 Patient room Cafe Reception area Thonburi Burana Hospital

• Rehab hospital for elderly who need special care, such as

chronic patients, Alzheimer etc.

• 54 beds to operate in 1st phase
• IPD rooms, OPD clinics, medical staff, services from

physical therapist, dieticians and psychologists

• Expect operation in February 2019

Jin Wellbeing County – Jin Wellness Institute

12 Jin Wellness Institute Two 5-story buildings: 5,685 Sq.M. and 8,058 Sq.M. comprising

• 1. Integrative Wellness Clinic and Medical Spa – for customized health plan
• 2. Jin MediFit – Gym with professional instruction
• 3. Life Enrichment – activities for mind and emotional balance

Activity room Spa Cooking studio Restaurant

• 4. Learning activities – Art & music therapy, cooking etc.
• 5. Nutrition and meal plan – customized healthy meals

Jin Wellbeing County – Sales and marketing

13

Target = 200 units within 2018 Current sales = 160 units More than 70% of customers are 50+ years old and buy for themselves. Sales promotion

• Ready-to-move-in campaign
• 6% yield guarantee for investors
• Activity booth
• Grand Age Management: classes and activities for senior

lifestyle

Jin Wellbeing County – Award and program

Jin Wellbeing County won

• Best Senior Living Development
• Highly Commended for Best Universal

Design Development from Property Guru Thailand Property Award 2018, which is one of the longest- history award in Asian property industry. Grand Age Management Program

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 62,000 baht Price per unit

• Approx. 4-6 mn baht

(43 and 63 Sq.M.) 1.98 mn baht (32 Sq.M.)

Thonburi Senior Home – Comparison

15

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. Ready to transfer December 2018 Wellness center completion March 2019

16

Thonburi Health Village – Pracha Uthit

Pracha Uthit Rd.

Building B 206 units Building A 206 units Future project Building C Wellness Center

17

Building E Future project

Thonburi Health Village – Pracha Uthit

Room design - 32 Sq.M. unit

18

Universal design for all

wide corridor for wheelchair

Thonburi Health Village – Pracha Uthit

Wellness Center

• Medical spa
• Salt chlorinator pool
• Gym and personal trainer
• Activity area
• Healthy cuisine restaurant
• Physiotherapy clinic

19

Growth prospect

• Strong core business

with stable growth

• Higher margin from

asset-light model

• Organic growth from volume, price and

medical intensity, with capacity expansion

• Potential growth from Thonburi Thungsong

Hospital and from Thonburi Health Village – Prach Uthit in 2019 onwards

• Expected growth from new opportunities

both domestically and internationally

Hospital & excellence center management

• Ramping up after grand
• pening
• Less shared loss due to

more patients volume

Hospital & excellence center management Domestic hospital & business Domestic hospital & business Welly Hospital Jin Wellbeing County

Thonburi Bamrung Muang

• Expected units transfer in 4Q18
• Expected operation in 4Q18

Ar Yu Hospital

• Expected operation in 3Q18

with loss shared to THG in first year

2017 2018 onwards 20

Financial information

21

3 2 19 6 2 80 100 87 83 101

1,495 1,641 1,632 1,594 1,572

2Q17 3Q17 4Q17 1Q18 2Q18 Others Healthcare solution provider Medical service

2Q18 Financial Performance

Total revenue (mn THB)

1,743

+6.1% YoY

1,578 1,738 1,683

Medical service +5.2% YoY

• Revenue growth in 2Q18 continued, mainly from Thonburi 1 Hospital that saw increase in patient

volume due to new excellence centers and more collaboration with insurance company.

• However, slower growth was because of revenue decrease in overseas advisory business.
• Opening of heart center at Thonburi 2 Hospital contributes to improvement in IPD after having to partly

close a ward for renovating of heart center, and contributes to higher revenue for excellence center business.

• THG saw good revenue growth in the first half of 2018 mainly from 1Q that compensated with lower

season in 2Q.

22

1,675

5 8 227 184

2,899 3,166

1H17 1H18

3,131 3,358

+7.3% YoY

Medical service +9.2% YoY

2Q18 Financial Performance

Gross profit (mn THB)

• 0.9% YoY

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

• 5.3% YoY
• 45.0% YoY

23

434 508 508 478 430 27.6% 29.1% 29.3% 28.4% 25.7% 2Q17 3Q17 4Q17 1Q18 2Q18 Gross Profit GP Margin 814 907 26.0% 27.0% 1H17 1H18 Gross Profit GP Margin

+11.4% YoY

263 333 314 348 249 16.7% 19.1% 18.1% 20.7% 14.9% 2Q17 3Q17 4Q17 1Q18 2Q18 EBITDA EBITDA Margin 500 597 16.0% 17.8% 1H17 1H18 EBITDA EBITDA Margin

+19.4% YoY

131 171 158 158 72 8.3% 9.8% 9.1% 9.4% 4.3% 2Q17 3Q17 4Q17 1Q18 2Q18 Net Profit -Parent NP Margin 225 230 7.2% 6.8% 1H17 1H18 Net Profit -Parent NP Margin

+2.2% YoY

2Q18 Operational statistics – TH1, TH2, RYD

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

24

46% 46% 45% 45% 46% 46% 54% 54% 55% 55% 54% 54% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 % OPD Revenue % IPD Revenue 60% 60% 65% 61% 61% 60% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 63% 60% 71% 65% 68% 61% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Self pay 81% Insurance 14% Corporate 5% Others 1%

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 TH1 TH2 RYD

35

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 TH1 TH2 RYD

243 260 277

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

25 260 36 38 41 39 34 247 258

2Q18 Operational statistics – TH1, TH2, RYD

2,336 2,386 2,383 2,398 2,459 2,452 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 18,868 20,363 19,435 19,848 19,609 21,259 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18

+2.8% YoY +3.9% YoY +4.4% YoY +2.8% YoY

• Approx. THB3,000 for TH1 and THB1,700 for TH2 and RYD
• Approx. THB21,000 – 24,000 for TH1 and TH2,

and THB13,000 for RYD

2.4 1.6 4.4 3.2 2015 2016 2017 2Q18 2.6 1.0 0.6 0.8 2.9 3.6 3.2 4.0 2015 2016 2017 2Q18 2Q18 IBD Interest 4Q17 IBD Interest Non-current Current 2% 28% 70% 12% 24% 64%

2Q18 Capital management

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

On 24 April 18, AGM approved dividend payment for 2017 performance at

THB 0.40/share = 56% payout

• XD 8 Mar 18
• Payment date 21 May 18

Dividend policy: not less than 40% of net profit

Equity LT loan 2Q18 4Q17 IBD/EBITDA (x) D/E (x)

IBD / EBITDA Covenant: <6x

26

ST Loan

DSCR ratio (x)

232 3,451 3,252 1,720 35 37

5.7 5.0 5.3 5.4 2015 2016 2017 2Q18

DSCR Covenant: >1.2x

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

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