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Thonburi Healthcare Group PCL
27 February 2017
Press Conference
2
Agenda
Company Overview1
2
3
4
Business Highlights
Investment Highlights
Transaction Summary
3
Part 1: Company Overview
4
6020 600Registered
Capital (THB mm)
300 764 849
Company Vision & Key Milestones
Restructuring and preparing for Initial Public Offering (IPO)
20141991
Increased available beds from 60 beds to 113 beds
1980 2011
199719951977
2016
Entered into Public-Private Partnership agreement to provide hospital management service for Phuket Provincial Hospital
Signed JV agreement with WEGO Holding (China) to set up JV hospital, Welly Golden Bay Hospital
Registered as a public company limited
1994 1996
2003
2009
Investment in RajthaneeRealty Co., Ltd.
2001
2012
Entered into Public-Private Partnership agreement to provide hospital management service for Pattaya City Hospital
Thonburi Hospital started operation
Collaborated with Siam University to set up Bachelor of Nursing Curriculum
2013
Collaborated with Siam University to set up a curriculum for Faculty of Medicine
1993
Opened Thonburi 2 Hospital
Investment in Dental Siam Co., Ltd.
Investment in Rajyindee Hospital Public Company Limited
Investment in Thonburi Hospital Heart Centers Co., Ltd. And Premiere Home Health Care Co., Ltd.
Over 40 years of experiences in hospital business
Vision“To be provider of extensive medical resources and n etwork of hospitals with qualified standards, using cutting-edge
medical innovation, gaining patients and families’ trust, and providing healthcare services at an affo rdable price”
5
Part 2: Business Highlights
6
Hospital Business Healthcare Solution Provider Other Business
Domestic / International Hospital
• 6 Hospitals
• Registered Bed: 1,116 Beds
Available Bed: 833 Beds in Thailand
23 Beds in China
• OPD Rooms: 195 Rooms
Hospital Management Service
• 2 Hospitals and 1 Medical Center
• 239 Beds under management
Excellent Center Management Service
• 2 Heart Centers under management
Home Healthcare
• Medication services to patient’s home ex. check up, treatment, rehabilitation
Dental Supplies Retailer and Drug Stores
• 10 Drug stores (as of today)
• Exclusive distributor for dental supplies: 30 brands
Step-Down Care [Future project]
• A rehabilitation center for patients who need no close watch from doctors
Medical City Rangsit [Future project]
• The mixed-use development to provide services needed by senior in all ages
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 1,672 mm
Business Characteristics
2 31
2015 Revenue: THB 5,416 mm (93.6%) 2015 Revenue: THB 358 mm (6.2%) 2015 Revenue: THB 12 mm (0.2%)
7
Hospital Accreditation of Thailand (HA)
• 5 Hospitals
International Organization for
Standardization (ISO)
• 1 Hospital
Neuroscience Center
Orthopedic Center
Women’s Center
Heart Center
Gastrointestinal and Liver Center
Hospital ManagementExcellent Center Management
Network Hospital
Hospital (Thailand) 5
2
2
9
Network Hospitals 5 Key Excellent Centers
Hospital Standard Accreditation
1.1 Hospital Business
• Hospital Management –Phuket Provincial Hospital
• Rajyindee Hospital
• Ubonrak Thonburi Hospital
• Hospital Management –Pattaya City Hospital
• Heart Center - Bangplee Hospital• Heart Center - Phatra Hospital
• Welly Golden Bay Hospital (China)
• Thonburi Hospital• Thonburi 2 Hospital
• Sirivej Hospital Chanthaburi
5 domestic 1 international hospitals and other medical networks
Hospital (China) 1
8
Thonburi Hospital Heart Center Co., Ltd. serves both private and public hospitals those lack teams of highly skilled cardiologists, medical staffs and advanced machines which will allow heart patients to get access to high quality care with lower price.
Location of Service• Bangplee Hospital (Public)• Phatra Hospital (Private)
Business Model• Public Hospital – Government bare the cost for machines• Private Hospital – The company co-invests in machines
1.2 Management Service Business
THG is the first private hospital to enter into Public – Private Co-operation agreement with Ministry of Interior and Ministry of Public Health. Using its specialties in hospital / excellent center management and network connection with many specialists, this
so-called ‘Asset Light Model’, which requires less capital in vestment and provides a considerably high profit ma rgin
Public – Private Co-operation
Expand THG’s Patient Base
Better Quality of Service for Public
Hospitals
Better Quality of Life for People in
the Area
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
High bloodpressure
Heartdisease
Diabetes Anemia Renalfailure
2009 2013
Top 5 Leading Causes of Hospitalization /1
25%
13%
5%
1%26%
Provide public hospitals with experienced doctors medical staffs and professional management team, aiming to bridge the gap between public and private hospitals’ healthcare standards as well as mitigating excessive waiting periods and staff shortages commonly found in public hospitals.
Location of Service• Pattaya City Hospital• Phuket Provincial Hospital• Central Medical Unit (CMU)
(Kohlan)
HOSPITAL MANAGEMENT
EXCELLENT CENTER MANAGEMENT
Business Model• Few CAPEX – High ROE/ROA• Fixed contracted revenue• THG responsible for cost
management
1/ Sources SCB EIC analyst research
9
Company Dental Siam Co., Ltd.
Business One-stop service dental supplies shop
Customer Faculty of Dentistry of well-known universities
Product Exclusive distributor of dental supplies 30 brands
Premiere Home Health Care Co., Ltd offers solution for better health, better treatment follow-up, and better quality of life for the whole family with services delivered to your home
by a multidisciplinary team of experienced medical personnel.
• Medication dispensing and delivery• Health evaluation & Blood analysis • Vaccination and immunization• Information and counseling
• Wound care• Post-surgery care• Pain management• Fall prevention
• Physical therapy for patients with orthopedic symptom
• Physical therapy for patients with neurological disorders
• Cardio-Pulmonary Rehabilitation
• Ultrasound for blocked milk ducts The company has allergy and dust mites specialists and expert staffs to create clean environment that meet hospital standards for every home
�Cost Saving
�Enhance Quality of Life
�Time Saving
10 Drug stores brand “Apex”
• The Mall Ramkamhang G floor• The Mall Ramkamhang 1nd floor• Tops Central Rama 3• The Mall Ngamwongwan G floor• The Mall Ngamwongwan 5th floor• Fashion Island• Futurepark Rangsit• Platinum Fashion Mall • JAS Srinakarin (open Nov 2016)• Makro Wanghin (open Dec 2016)
Basic Treatment
Service for New Mom
Skilled Nurse Service Physical Therapy Service
Standard Hospital-Accredited Housekeeping
[Future project]
HOME HEALTHCARE
STEP DOWN CAREDENTAL SUPPLIES & DRUG STORES
2. Healthcare Solution Provider Business
Operated Under
1 2Business • Rehabilitation Center
Target Customer
• Recovering patients• Patients with chronic diseases
Key Benefit to THG
• Reduce ALOS of IPD patients and increase revenue per bed day of Thonburi Hospital
Key Benefit to Customer
• Reduce financial burden of the patient and family
10
Location: Rangsit – 40 km. from CBD / 5 km. from major attraction / Easy access via public transportation and toll way
Project area: 140 rai
Appraisal value: 2,477 THB mm/1
Project counterparties: SHMA, Thomson Adsett (specialized in seniors living design), OPNBX, VAMED (global provider for hospitals and other facilities in the healthcare sector) Ju
ly 2
01
8
Pha
se 1
Pha
se 2
Pha
se 3
Mid
20
20
Expect completion Mid 2022
Highlight: 1) 24 hrs emergency
2) Personal tracking GPS
3) Full range of medical services
Project Map
Target Customers
Young Senior (Age 45 – 60)Working age groupIncome: THB 200,000 monthly
Thai/Foreign InvestorsFor rentalFor short term/long term investment
Phase 1 : Active Living / Aged Care / Wellness Cent erPhase
Remark: /1 Appraised value on 1 March 2016 by Fast and Fair Valuation Co., Ltd.
Elderly (Aged 60 or above)Single or married Income: THB 80,000 monthly
Adult (Aged less than 45)For parentsIncome: THB 100,000 monthly
2. Healthcare Solution Provider Business (Con’t)
SENIOR LIVING COMPLEX
1) Active Living• Selling price – 90,000 to 120,000 THB/sq.m.• Units / Area – Total 1,300 units and NSA 70,000 sq.m.
2) Aged Care : 200 beds (initially available 100 beds)*With monthly fee charged*
3) Wellness Center• Rehabilitation Center – e.g. hydrotherapy• Community center facilities – e.g. fitness center, swimming pool
*With rehab package and membership fee charged*
Type of Facilities
[Future project]
11
THG Group Strategy – Overview
GROUP BUSINESS STRATEGIES
Medical City Development
Software Development
& Project Development
Dental Supplies & Drug Stores
Home Healthcare
Step Down Care
Excellent Centers
Provincial Hospitals
Hospital Management
Inter-national
Hospitals Hospital
High Medical Intensity
Low Medical Intensity
Hospital Business
• To expand service capacity in core hospitals
• To cover wider range of medication ex. cancer center, critical care
• To extend hospital network in provincial area with high growth potential
• To selectively invest in international hospital with strong partner
Other Supporting Services
• To increase drug stores coverage and extend market for dental supply
• To develop land in potential location for future projects in pipeline
Hospital / Excellent Center Management Services
• To expand and strengthen management service partnership network, focusing on “Asset Light Model” which contributes higher margin
• To grow hospital management services on international level, currently signed MOU to manage Tong He Hospital (China) and negotiate on turn-key services for ARYU International Hospital (Myanmar)
Home Healthcare / Step – Down Care / Senior Home
• To service a full-coverage of medical care ranging from Hospital (high and complete care), Step-down Care (rehab center), Senior Home Care (24-hour elderly care) to Home Healthcare (check up and follow up treatment at home)
“THG’s core competencies lies within its hospital operation that synergizes with the overall group’s
businesses”
12
Partner Background
Leading manufacturer of medical devices in China
A large medical group in China
Leading company in brand developer, property & real estate, hotel, retail, and trading business in Myanmar
Welly Golden Bay hospital
Location: Wei Hai, Shandong provinceProject: Private hospital in an area
mostly populated by state hospital
Strategy for Expansion into International Market
Management Contract
1. Strategic Increase – Using asset light model that enhance ROE and ROA
2. Focus on Asia region
3. Tap into markets where level of medical sophistication offered by local hospitals are insufficient for local demand
Investment
1. Selective Increase – Promising growth potential
2. Leverage on strong partner is one of key factor
3. From initial small investment until proven success
Management Contract
Location: Guandong, ChinaProject: Hospital management for
Tong He hospital
Tong He HospitalARYU International Hospital
Location: Yangon, MyanmarProject: Build the first hospital with
international standard in the area
Ga Mone Pwint
Asia Continent
Tong He Hospital
Ga Mone Pwint
Project Details
Welly Golden Bay hospitalPrivate hospital with 200 registeredbeds and 23 active beds due to currentrenovation but expect completion
Tong He HospitalManages Tong He hospital. Contract isunder negotiation and initial fee of CHY6 – 9 mm is expected
ARYU International hospitalNegotiating on turn-key for design hospital with contractvalue 20m$ and design management system and medicalequipment with contract value 25m$
Strategy for International Hospital & Management Service
13
Hospital Management Healthcare Solution Provider
Tha
iland
Inte
rnat
iona
l
• Promote product champion• Focus on innovative product
• Increase ALOS for step down care
• Leverage on group’s comprehensive range of medical service from high care (Hospital) to less care (Active Living)
THG Potential Growth Area
• OPD ▲106 roomsIPD ▲ 90 beds
• Boarder medication coverage• Utilized hospital idle time• Penetrate high growth market
• Price improvement strategy• Increase IPD pay per bill due to step-down care• Enhance sophistication of treatment
TH – Increase medical coverageTH2 – Improve to Tertiary care
• Increase existing contracts value • Implement management contracts in pipeline• Penetrate public hospital to get access to new
market i.e. UC and Social Security
• Expand service to network hospitals that have less medical sophistication
• 1-2 contracts in pipeline in 2017
Hospital Management Service
Excellent Center Management Service
Volume growth
Price Growth
Home Care
Step-down Care
Asian Region
China• Welly Golden Bay Hospital – Increase available
beds after renovation
Myanmar• ARYU International Hospital – Invest 10% - 40%
of registered capital of 50m USD depending on success of the project
Hospital Management Service
China• Signed MOU to manage Tong He Hospital with
contract valued 6-9m RMB
Myanmar• Negotiating contract on turn key project for
ARYU International hospital in Myanmar. Contract is valued at 20m USD and 25m USD
Senior Care
Potential growth areas focus on 3 major businesses, using resources and knowledge to expand territory both domestic and international
14
5,370 4,689 5,330 4,892
1,4541,689
2,0175,006
3.69
2.78 2.64
0.98
-0.30
0.20
0.70
1.20
1.70
2.20
2.70
3.20
3.70
0
2,000
4,000
6,000
8,000
10,000
12,000
2013 2014 2015 9M16
Total Liabilities Total Equities D/E
3,180 3,512 3,527 2,647 2,714
636 666 718
521 622
624 627 674
497 536
2013 2014 2015 9M 2015 9M2016
TH TH2 RYD
Group Financial Highlight
THG has promising revenue growth both Hospital Busin ess and Management Service Business
THG Group Revenue Revenue from Hospital Business
Revenue from Management Service Business
Unit: THB mm
5,121 5,515
5,787
4,289 4,661
2013 2014 2015 9M15 9M16
Unit: THB mm
CAGR 6.3%
8.7%CAGR 5.3%
5.7%
Unit: THB mm
149 180 229
163 220
181 198
210
158 162
58
37
111
2013 2014 2015 9M 2015 9M2016
PTY PKT HCT
CAGR 22.7% 37.7%
Balance Sheet
6,824 6,3787,348
9,898
4,4404,805 4,919
3,665 3,872
330378
497
358
493
15
301
453 552
348 405
5.9%
9.8%9.5%
8.1%8.7%
2013 2014 2015 9M15 9M16
Net profit Net profit margin
666
802 868
617 731
13.0%
16.2%
15.0% 14.4%15.7%
2013 2014 2015 9M15 9M16
EBIT EBIT Margin
910
1,034 1,095
785 908
17.8%
20.4%
18.9% 18.3%19.5%
2013 2014 2015 9M15 9M16
EBITDA EBITDA Margin
Group Financial Highlight
Steady improved in margin both Y-o-Y and Q-o-Q with relatively high ROE
ROE
EBITDA Margin 1/
Net Profit Margin 2/
EBIT Margin 1/
Unit: THB mm
Unit: THB mmUnit: THB mm
90
1/ Exclude exchange gain loss 2/ Exclude NCI Excluding non-recurring revenue
90
85
Normalized 18.7%
ActualNormalized 14.5%Actual
Normalized 8.2%Actual
22.30%
38.90%34.00%
2013 2014 2015
16
Part 3: Investment Highlights
17
Investment Highlight
Over 40 years of experiences in healthcare industry
Thonburi Healthcare Groupone of the most sophisticated private hospital oper ator in Thailand
Established in 1977; Registered as public company in 1994
First Mover in Public-Private Co-operation Project
First mover in Public-Private Co-operation projects, pursuing “Asset-Light Model” by offering hospital and excellent center management services
Extensive Medical Resources and Network
17 Network hospitals allow THG to capture benefits in term of cost control and revenue generating from client referral
Investment Highlight
Medical Sophistication & Affordable price
Specialized doctors and nurses from most well-known medical schools that can offer quality treatment at affordable price for mid to low income people
First Mover in Full-Coverage Medical Business
First mover to expand into full-coverage medical businesses with innovative healthcare services
18
Medical Sophistication & Affordable Price
Medical and Hospital Standard AwardsSpecialized doctors in Excellent Centers
Hospital Accreditation
1
International Organization for Standardization
Investment Highlight
“One of the most sophisticated ICU centers, e.g. CCU (Cardio care Unit), RCU (Respiratory Care Unit), and other Intensive Car e Units (ICUs)”
18,609
28,293
VIBHA TH1&2 RAM BDMS SVH BH
2,364
3,867
VIBHA TH1&2 RAM BDMS SVH BH
Affordable Price Range 1/
1/ Sources from 56-1, SCBS research, and company information
There are rooms for IPD and OPD price increase compa red to average market rate
Neuroscience Center
Orthopedic Center
Women’s Center
Heart Center
Gastrointestinal and Liver Center
IPD Price OPD Price
19
Invest in training qualified medical staffs by coordinating with Siam University for both Faculty of Medicine and Faculty of Nursing.
Key benefits
Central regionThonburi Hospital Bangkok
Thonburi 2 Hospital Bangkok
Thonburi Uthong Hospital Suphan Buri
Rajthanee Hospital Phra Nakhon Si Ayutthaya
Phatara-thonburi Hospital Pathum Thani
Pattaya City Hospital Chonburi
Western region
Thanakan Hospital Kanchanaburi
Sirivej hospital Hospital Chanthaburi
North-Eastern region
Ratchaphruek Hospital Khon Kaen
Roi-et Thonburi Hospital Roi Et
Ubonrak Thonburi Hospital Ubon Ratchathani
Southern regionPhuket Provincial Hospital Phuket
Thonburi-Chumphon Hospital Chumphon
Nakhonchristian Hospital Nakhon Si Thammarat
Trangruampat Hospital Trang
Rajyindee Hospital Songkhla
Siroroj Hospital Yala
Economies of scale allows the company to purchase medical equipment and supplies at lower prices
4. Bargaining power
3. Patient referral
Quick medical services for those patients who urgently need quick treatment
1. Knowledge sharing and co-development
Cooperation among hospitals in network to develop or improve quality of medical treatment
Extensive Medical Resources and Network
17 Network Hospitals in Strategic Location across T hailand
2
2. Qualified Medical Resources
Investment Highlight
20
First Mover in Public-Private Co-operation Project with government3
Expand THG’s Patient Base
Better Quality of Service for Public
Hospitals
Better Quality of Life for People in
the Area
Investment Highlight
• Asset Light Model� requires less capital investment � provides a considerably higher
ROA ROE ratios as compared to hospital business
• High Barrier to Entry: This business model requires THG’s specialties in hospital and excellent center management through its network connection with many specialists
• First mover to enter into Public –Private Co-operation agreement with Ministry of Public Health and Ministry of Interior
• Enable THG to expand customer base to capture patients that use Universal Coverage (UC) or Social Security benefit
21
First Mover in Full-Coverage Medical Businesses4
Hospital and Management Service
Step-down Care
z
• A rehabilitation for patients who no longer have to be under close watch of doctors
• This increases IPD turnover rate and average pay per bed day for Thonburi Hospital and ease financial burden of the patients
• Network of tertiary hospital and hospital management services
• Specialized doctors from one of Thailand most well-known medical schools at an affordable price
Senior Home Care
• A living community for elderly that offers all levels of service and care, from active living, assisted living, to nursing home with 24-hour hospital in the area
Home Healthcare
• Solution for patients with difficulties in finding time to go to hospital or elderly with inconveniences to make repeated trips to hospital
Investment Highlight
“LIFETIME HEALTH GUARDIAN FOR ALL”
22
Part 4: Transaction Summary
23
Transaction Summary
Company Name Thonburi Healthcare Group Public Company Limited
Stock Exchange / Sector SET / Hospital
Registered Capital 849.08 THB mm / 849.08 m shares @ THB 1.00 par value
Paid – up Capital 764.08 THB mm / 764.08 m shares @ THB 1.00 par value
IPO Size 85 m shares
Use of Proceeds Funding new projects / loan repayment / working capital
Dividend Policy ≥ 40 percent of net profits
Financial Advisor
Lead Underwriters
Indicative Offering Structure
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