VIBHA - FN323 - For Presenting

Members
Hasadin Phonrabul Jidapa Srivaranun Kanokporn Navykarn

5902640134 5902640175 5902640225
Kyung Jin Park Palita Varojpiputhn Prem Phansuriyanon Siramol Chaijindawat

5902640282 5902640548 5902640878 5902640993
Executive Summary
VIBHAVADI MEDICAL CENTER PLC
Company Rating Issue Rating Outlook

Senior unsecured
A- A- Stable
Sound business profile Recovering financial Satisfactory credit

and competitiveness performance analysis
Situation Overview Analysis Performance Credit Analysis

Sound business profile and
competitiveness
Company Overview
Capacity
VIBHA is is a Thailand-based In 2018
company engaged in the provision
Over 91,000 inpatients
of healthcare services.
and 657,000 outpatients
2,000 outpatients/day 250 registered beds
1986 Establishment of company

Founded with only one building,
2003 Joint Venture to establish
Vibharam Group Hospitals 2011 Acquired CMR group
Hospitals
100 bed hospital Targeting Government-subsidized
Largest market share in
programs and middle-income
Northern part of Bangkok
population
Establishment of
1992 Registered with SET
Started Trading March, 1992
2009 Princeton Park Suites
Source : Annual report / opp day
Invest in non-core business

Company Overview
Operating Area Medical Service of Vibhavadi Hospital
● Brain and Nervous System Center

● Wellness and Occupational Health Center
● Gastrointestinal Center
● Dental Center
VIBHA is focusing on both Central and Northern ● Heart Center
part of Thailand
● Infertility Treatment Center
● Emergency Department
● Pediatric Center
● Advanced LASIK Center
Source : Annual report / opp day

Shareholding Structure of VIBHA
Source : opp day

Revenue Structure
Revenue contribution
95.67%
Medical Fee IPD 47% OPD 53%
*from medical fee only for the company
95% of patients are Thai
Medical Fee - 95.67% Dividend -1.22% 16% of total revenue are from social security
Rental Service - 1,60% Others - 1.51%
Source : Annual report

Management
Management Position Key Directors

Maj.Gen. Suriya Phalakornkul Chairman of the board
Vice chairman of the Board of Directors /
Mr. Nikom Wairatpanij Independent director / Audit committee
Chairman of executive board / Managing
Mr. Chaisith Viriyamettakul Director / Director
Maj.Gen. Suriya Phalakornkul
Mr. Sitthi Panupattanapong Director
Chairman of the board
Mr. Racha Somburanasin Director
Mr. Chamnan Chanapai Director
Mr. Pongpat Patanavanich Director
Mr. Varaphan Unachak Director
Miss Rukkagee Kanjanapitak Director
Mrs. Bavornphan Rathprasert Director
Mr. Phijit Wiriyamettakul Director Mr. Chaisith Viriyamettakul
Independent director / Chairman of the audit
Chairman of the board / Managing
Mr. Som Vanprapa committee
Director
Mrs. Rae-vadee T.Suwan Independent director / Audit Committee
Lt.Gen. Samang Thongpan Independent director / Audit Committee
Gen. Boonloet Chuntarapas Independent director
Source : SET

Shareholder Structure
Top 10 major shareholders @21 Mar 2019 Shares %
Mr.Chaiyasit Viriyamettakul 1,959,000,000 14.84
F&S 79 Company Limited 1,928,242,766 14.61
Synphaet Company Limited 1,167,239,166 8.84
Ramkhamhaeng Hospital Public Co., Ltd. 932,497,800 7.06
Chaophya Hospital Public Co., Ltd. 803,634,195 6.09
Vibharam Hospital Company Limited 564,043,133 4.27
Mr.Pijit Viriyamettakul 379,700,000 2.88

Free Float 20 Mar 2018
Mr.Pisut Viriyamettakul 299,200,000 2.27
%/Shareholders 34.86% | 10,206
Thai NVDR Company Limited 218,093,680 1.65
Foreign Shareholders 1.91% (As of 12/04/2019)
Ms.Niramol Viriyamettakul 172,480,000 1.31
NVDR Shareholders 1.62% (As of 12/04/2019)
Source : SET

SWOT Analysis
STRENGTH
WEAKNESS
● High-standard medical reputation
● Expertise in specialized treatment
● Demographically diversified ● High cost of hospital operations
OPPORTUNITY
● Government policy and support
THREAT
● Growth in medical tourism,
wellness tourism from China ● Competitiveness among top
and CLMV countries healthcare service providers
● Insufficient medical personal
Source : MOPH, Krungsri Research

Future Plan (mei)
Core business: Consistently improve operations and develop services 2021
-Plan to open Vibharam Thonburi

and Vibharam Pathomwetch
2020 - Buy land for Ramkhamhaeng
-Expansion plan in existing company
both within country and oversea
-Plan to buy and expect to open
2019 Ramkamkhaeng
-Expansion plan in existing
company both within country
and oversea
-Expand Vibharam
Hariphunchai and Lanna
-Open Rayong, Nawamin,
and Vibhavadi new building
-Expansion plan in existing
company both within country
and oversea
Source : VIBHA 56-1 and Opp Day

Industry Outlook - Private Hospital Sector
Healthcare Facilities in Thailand Large Private Hospital features
1.7 % Tertiary health care providers

347 hospitals are private hospitals Large hospitals (>250 beds)
41,000 beds in Private hospitals 21 large private hospitals (6% of all private hospitals)
11,772 beds (28.9% of all private hospital beds)
➢ Extended business network by M&A and
expansion allows to take advantage of economies
of scale and gains strong capital base
➢ Adjusting strategies for Middle-income

consumers who are price sensitive and could turn
Source : MOPH, Krungsri Research to Public healthcare Scheme.

Five Forces
Bargaining power of
suppliers
➢ Large number of Bargaining power of
Threat of pharmaceutical companies
substitutes buyers
➢ The biggest portion of
➢ Public tertiary hospital ➢ Individual patients sensitive to
revenue comes from
➢ High bed occupancy rate price
medicine
➢ Long waiting times ➢ Necessity of service keeps it
moderate
Moderate
Low Moderate
Threat of Rivalry among
New entrants Competitors
➢ High initial cost ➢ High competition among
➢ Solid reputation & extensive private hospital group to
network by original players gain larger market share
“low levels of risk since

Low healthcare is a necessity” High

Competitive Landscape
129.734 billion baht 403.476 billion baht 44.139 billion baht
Operates a hospital under Own and operate 45 Own and operate 12

the name “Bumrungrad hospitals hospitals and one polyclinic
international hospital
Strong brand franchisees Market position in patient
Well-accepted brand covering middle-to-high-end who enrolled in the social
internationally segment security coverage scheme
A+ AA- A-
BANGKOK DUSIT MEDICAL
BUMRUNGRAD HOSPITAL PLC BANGKOK CHAIN HOSPITAL PLC
SERVICES PLC

Industry Key Growth Factors
Aging Society Growth in Middle class Support from Government
41%
36%
➢ Elderly (age >60) will ➢ Middle-class with greater ➢ Beneficiary of government

reach 13.1million by 2021 spending power policy to promote Thailand
➢ Spending on healthcare ➢ 6 million families will have as international medical
for elderly increases to an income greater than hub
THB 228 bn by 2022(2.8% USD 15,000 per annum by ➢ Investors encouraged to
of GDP) 2020 put money in the sector
➢ NCD(Non-communicable which will eventually cut
disease) tends to rise down cost of production
Source : NESDB, BCG’s Center for, Customer Insight

Challenges in Industry
Labor Shortage High-Tech Intervention required
0.4 Doctors and Nurses

Per
1,000 people
✔Elderly will need ✔Competition among
treatment for chronic and hospitals gets higher
complex conditions domestically and
internationally
Expansion by private sector hospitals will Demand for specialist services with High
tend to increase competition for staff and tech increases
this will then lead to higher business costs.
Source : World Health Organization (WHO)

Recovering financial performance
Historical Performance
Sales from 2014 to 2018 Net Income from 2014 to 2018
5.8% CAGR
Net profit at
876 MB in
2018
772 941 866 decrease
1065 876 from 2017
by 10.2%
EBITDA & EBIT Margin

Constant growth of Vibhavadi hospital
90% occupancy rate in Lanna hospital
Lower revenue from rental and service

since 2016
Source : Annual report

Projection of Revenue
Forecast of VIBHA Sales
CAGR
7.6%
Growth Factors
Expansion of Core Business Growing demand Operation of new commercial zone
Increasing demand from aging 60 million baht of revenue support

New Lanna building in 2021 to support
population, increase in serious from Vi Plaza
excess occupancy rate
illness, and support from government
Source : Annual report and team analysis

Cost and Operating Profit
VIBHA Operating Profit
Hitting low point in 2018

due to high cost of
medical treatment
Anticipate stable
operating margin at 19%

Investment
Investment CAPEX
2019:
- Vibharam Rayong
- Vibharam Nawamin 300M-400M
- Vibhavadi new shopping complex building
- including commercial space, parking lots, labs, and
clinics 400M-500M
- Vibharam Lanna expected to open in 2021
- Vibharam Hariphunchai
2020
- Vibharam Ramkamhaeng
- Investment overseas in ASEAN countries including
Myanmar, Cambodia, Laos
Source : Annual report and Opp Day

Liquidity Position
Cash and current investment Working capital
● Cash and current investment is projected to be ● VIBHA’s working capital is quite stable
at the current level despite continuous ● In 2018, VIBHA has higher A/R days due to
expansion increasing customers of CMR

Debt Structure and Leverage Level
Debt-to-equity ratio Capital structure

(As of December, 2018)
0.39 Assets Current Bt1,526 mn
Non-current Bt14,021 mn
Liabilities Interest bearing Bt3,711 mn
Non-interest-bearing Bt2,461 mn
Equity Bt9,375 mn
● VIBHA has a stable D/E ratio in the past five years Peer VIBHA BDMS BCH
● The ratio is expected to gradually decrease in the Comparison:
future due to higher policy rate in 2018 D/E in 2018 0.39 0.54 0.73
● Total debt to capitalization ratio in 2018 is 27.83%

Financial Ratios
Ratios 2016 2017 2018 2019F 2020F 2021F
Profitability Ratios
Gross Profit Margin 33.02% 32.01% 30.04% 32.00% 31.93% 31.89% Lower gross profit margin and
EBITDA Margin 27.57% 29.67% 25.33% 28.26% 28.20% 27.88% negative profit growth due to an
increase in cost of treatment
EBIT Margin 21.14% 23.16% 18.96% 21.40% 21.23% 21.02%
Net Profit Margin 19.00% 20.66% 16.46% 18.69% 18.67% 18.63%
ROE 15.08% 17.45% 13.54% 15.31% 15.30% 15.26%
Growth % YoY
Sales growth 6.37% 6.31% 6.10% 6.92% 6.87% 9.09%
Revenue growth 6.75% 6.30% 6.12% 6.52% 6.71% 8.89% Higher leverage in 2018 because of
Profit growth -8.00% 22.95% -17.67% 20.95% 6.75% 8.82% lower cost of borrowing
Leverage Ratios
Debt-to-Equity Ratio 0.30 0.35 0.39 0.37 0.36 0.34
EBITDA interest
coverage 1.74 1.79 2.20 1.88 1.79 1.64
Liquidity Ratios Weaker liquidity in 2016-2018
Current Ratio 0.32 0.41 0.38 0.37 0.39 0.43
Quick Ratio 0.26 0.35 0.33 0.31 0.33 0.37
Cash Ratio 0.07 0.12 0.08 0.07 0.08 0.11

Financial Ratios
Ratios 2016 2017 2018 2019F 2020F 2021F
Profitability Ratios
Gross Profit Margin 33.02% 32.01% 30.04% 32.00% 31.93% 31.89%
EBITDA Margin 27.57% 29.67% 25.33% 28.26% 28.20% 27.88%
EBIT Margin 21.14% 23.16% 18.96% 21.40% 21.23% 21.02%
Net Profit Margin 19.00% 20.66% 16.46% 18.69% 18.67% 18.63%
ROE 15.08% 17.45% 13.54% 15.31% 15.30% 15.26%
Growth % YoY
Sales growth 6.37% 6.31% 6.10% 6.92% 6.87% 9.09% The financial results are
Revenue growth 6.75% 6.30% 6.12% 6.52% 6.71% 8.89%
expected to improve in 2019
Profit growth -8.00% 22.95% -17.67% 20.95% 6.75% 8.82%
Leverage Ratios
to 2021
Debt-to-Equity Ratio 0.30 0.35 0.39 0.37 0.36 0.34
EBITDA interest
coverage 1.74 1.79 2.20 1.88 1.79 1.64
Liquidity Ratios
Current Ratio 0.32 0.41 0.38 0.37 0.39 0.43
Quick Ratio 0.26 0.35 0.33 0.31 0.33 0.37
Cash Ratio 0.07 0.12 0.08 0.07 0.08 0.11

Satisfactory credit analysis
Character
Who is borrower? Management Shareholders
Industry: Healthcare Service

Years of Service: 33 years
Maj.Gen. Suriya Mr. Chaisith
Phalakornkul Viriyamettakul
Services
● Wellness and Occupational

Health Center
Possible Use of Funds
● Heart Center
● Emergency Department Acquisition of assets Construction
● etc. M&A
Source : Annual report / Opp Day / SET

Capacity
Primary source Secondary source
CAGR
13% ● In 2018, Vibha has total assets of
Bt15,547 mn, Bt 1,526 of which is
current assets
● The company consistently issues

new ordinary shares
● VIBHA has investment property,

land and buildings, and stocks
as collateral
● CFO of the company is expected to increase
by 13% CAGR
● There is only little fluctuate in CFO, indicating
it is predictable and sustainable
Source : Annual report / Opp Day / SET

Capital (Qualitative)
Industry risk Business and management risk
Health care services industry ● Variety of core business

○ Healthcare center
○ Hotel and tourism
● Non-cyclical industry ● Operate mainly in central and northern part of
● Reaching mature stage Thailand
● Promising demand prospect due to aging
society, governmental support for SC scheme

Capital (Quantitative)
Key ratios
Profitability Leverage Efficiency ratio
: EBITDA margin : EBITDA interest coverage : Cash conversion cycle
VIBHA has a stable EBITDA EBITDA interest coverage ratio is VIBHA can maintain CCC days at
margin during the past five years, decreasing from 2015 to 2018 around 20 days
despite a decrease in 2018 due to due to higher leverage; however, it
higher cost, and the ratio is is expected to be higher
expected to be at this rate for the
next three years

Capital (Quantitative)
Key ratios
Profitability Leverage Efficiency ratio
: EBITDA margin : EBITDA interest coverage : Cash conversion cycle
Financial risk assessment
Auditor opinion: Unqualified opinion

Collateral and Covenant
Assets Covenant
● VIBHA’s total debt in 2018 is Bt3,614

million
● Asset quality is guaranteed by Joint
Commission International, ISO, and
Healthcare Accreditation
THB 1,526 mn THB 14,021 mn Auditor:

Current assets Non-current assets

CREDIT RECOMMENDATION
Company rating, issue rating, and future outlook
Credit Scoring
Qualitative factors Full score VIBHA Rating Score

Sector risk profile 20 17 AAA 175-180
Location 15 12 AA 165-174
Management strategy 20 17 A 150-164
Group structure 15 13 BBB 130-149
Business profile 30 27 BB 110-129
Quantitative factors B 90-109
Cash flows and profitability 25 20 C <90
Financial structure 30 26
Financial flexibility 25 21
Total 180 153 Peers’ rating
Company rating BDMS BH BCH
A- Rating AA- A+ A-

Rating Outlook
Stable outlook
Industry Business condition
➢ Increasing demand due to aging society ➢ Sound business profile
➢ Governmental support ➢ Improving operating performance
➢ Intense competition ➢ Moderate financial leverage
➢ Labour shortage
➢ Adaptation to new technology

Peer Comparison
(in 2018) VIBHA BDMS BH BCH

Total operating revenues (mn) 6,570 79,333 18,415 8,073
Operating income (mn) 1,540 17,175 6,110 2,123
EBITDA (mn) 1,640 18,939 6,381 2,184
Funds from operations (FFO) 1,354 13,360 5,340 1,770
Adjusted interest expense (mn) 162 1,165 161 143
Capital expenditures (mn) 512 7,700 893 1,259
Total assets (mn) 15,547 15,198 24,749 12,627
Debt to equity (times) 0.39 0.54 0.00 0.73
Operating income before depreciation and
amortization as % of sales (%) 25.33% 23.87% 34.65% 27.05%
EBITDA interest coverage (times) 10.14 16.26 39.63 15.27
Debt to EBITDA (times) 2.20 2.11 0.00 2.15
Total debt/capitalization (%) 27.82% 35.19% 0.00% 42.35%
Rating A- AA- A+ A-

Credit Rating of VIBHA

Senior unsecured
A- A- Stable
Sound business profile Recovering financial Satisfactory credit

and competitiveness performance analysis

Credit Rating of VIBHA

Senior unsecured
A- A- Stable
Rating sensitivities
● Upside case may occur if the company has better control over its costs of treatment and the financial profile can
be maintain at this level with an improve in liquidity
● Rating can be downgraded if cash flow protection decreases dramatically or VIBHA is unable to control costs

Key Questions
● What is your strategy on future expansion in both Thailand and other countries, especially in
Asian countries?
● What are your M&A and post-merger integration plan?
● Why was the cost of treatment in 2018 higher than the previous year and will it be at this level
in the future?
● How would you deal with an increasing debt-to-equity ratio?
● Do you think that increasing policy rate will change your capital structure and if yes, how
would it be?

Q&A
Future Expansion

VIBHA’s investment and expansion plan
2015 2016 2017 2018 2019 2020 2021 2022
Open Amata Samutsakorn Theparuk Thanyawetch Rayong Pathomwet Lanna Ramkham

CMR new Nawamin Nawamin h Thonburi Haripoonchai haeng
building (100M + Vibhavadi Lanna
800M)
Expand Lanna new Vibhavadi Suiriruk ChiangmaiR Haripoonchai Ramkhamha

building building(5th Lanna(plan am Lanna eng
floor) to)400M
Renovate Vibhavadi
CMR building
VBR building
Laemchabang
Amata
(Vibharam Amata
Oncology Center)
Vibharam Theparak97.8M, Thanyawetch 163M, Thonburi 163M, Pathomwetch

163M, Rayong 326M (total 912.8M)
Purchase Vibhavadi(8 Lanna Thepanya(400M Ramkhamh

land 4sq) ,5rai) aeng 400M
CMR(7rai)
Nakornsaw
an (35rai)
Acquisition Bangpo Sikarin 98M Ramkamhang

(1400M) Mahesak 1478.5M
Situation Overview 1,332,507,282
766,379,230 Analysis
1,053,989,582 486,355,867 Performance Credit Analysis
Balance Sheet
Balance sheet (Unit: THB) 2014 2015 2016 2017 2018 2019F 2020F 2021F
Assets
Current assets
Cash and cash equivalents 248,870,276 323,201,746 235,136,086 432,588,012 307,120,538 266,455,518 316,067,956 440,522,640
Current investments 1,288,703 1,311,790 7,245,005 756,928 766,088 766,088 766,088 766,088
Trade receivables 495,155,450 460,045,428 503,583,290 519,679,094 677,690,317 642,657,063 686,824,933 749,268,722
Short-term loans to related parties 343,000,000 313,000,000 123,000,000 294,000,000 336,300,000 336,300,000 336,300,000 336,300,000
Inventories 136,227,804 127,913,600 140,385,379 154,603,116 165,281,199 175,723,434 187,981,439 205,183,890
Other current assets 63,906,134 35,218,813 38,371,048 31,770,294 39,191,012 39,191,012 39,191,012 39,191,012
Total current assets 1,288,448,367 1,260,691,377 1,047,720,808 1,433,397,444 1,526,349,154 1,461,093,115 1,567,131,428 1,771,232,352
Non-current assets
Investments in associates 1,020,965,033 1,284,193,755 2,179,978,211 2,357,601,653 2,260,253,320 2,260,253,320 2,260,253,320 2,260,253,320
Long-term loans to related parties 5,625,000 5,625,000 29,625,000 29,625,000 29,625,000 29,625,000 29,625,000 29,625,000
Long-term loans to other persons 3,985,000 3,985,000 3,985,000 3,985,000
Investment property 173,636,859 171,843,665 236,425,470 233,246,605 248,232,481 266,367,371 284,259,621 301,912,476
Property, plant and equipment 3,969,255,248 4,405,255,215 5,376,779,656 6,042,589,361 6,125,498,640 6,659,744,768 7,153,369,353 7,609,461,065
Goodwill 723,215,731 723,215,731 723,215,731 723,215,731 723,215,731 723,215,731 723,215,731 723,215,731
Intangible assets 13,025,622 15,295,673 12,062,564 10,341,646 11,746,660 11,812,898 11,847,917 11,866,430
Other non-current assets 3,365,515,601 3,518,548,679 4,881,521,580 4,616,282,199 4,618,475,204 4,618,475,204 4,618,475,204 4,618,475,204
Total non-current assets 9,271,239,094 10,123,977,718 13,439,608,212 14,012,902,195 14,021,032,036 14,573,479,292 15,085,031,145 15,558,794,227
Total assets 10,559,687,461 11,384,669,095 14,487,329,020 15,446,299,639 15,547,381,190 16,034,572,407 16,652,162,574 17,330,026,579

Balance Sheet
Current liabilities
Bank overdrafts and short-term loans from
financial institutions 1,123,011,929 1,022,480,980 1,228,270,593 1,031,532,860 1,585,794,960 1,595,938,319 1,633,611,603 1,673,815,306
Trade payables 257,928,448 269,908,853 287,070,655 308,783,254 311,116,646 348,475,516 372,784,252 406,898,273
Current portion of long-term liabilities
Long-term loans from financial institutions 372,360,000 517,868,672 504,049,792 721,797,619 743,114,286 738,241,749 755,668,482 774,265,725
Liabilities under finance lease agreements 3,358,279 3,790,172 7,232,683 9,597,914 9,427,241 8,320,231 8,516,636 8,726,233
Other current liabilities 1,091,285,048 1,049,450,402 1,264,098,497 1,462,037,736 1,353,509,721 1,298,903,588 1,298,903,588 1,298,903,588
Total current liabilities 2,847,943,704 2,863,499,079 3,290,722,220 3,533,749,383 4,002,962,854 3,989,879,404 4,069,484,561 4,162,609,126
Non-current liabilities
Long-term loans from financial institutions 612,291,215 791,259,792 1,017,330,000 1,685,369,048 1,362,239,812 1,381,665,690 1,414,280,912 1,449,086,817
Liabilities under finance lease agreements 14,421,003 12,649,863 14,761,036 14,161,741 10,399,315 18,255,879 18,686,822 19,146,711
Other non-current liabilities 672,362,279 701,525,726 935,144,448 845,565,996 796,292,833 796,292,833 796,292,833 796,292,833
Total non-current liabilities 1,299,074,497 1,505,435,381 1,967,235,484 2,545,096,785 2,168,931,960 2,196,214,402 2,229,260,567 2,264,526,361
Total liabilities 4,147,018,201 4,368,934,460 5,257,957,704 6,078,846,168 6,171,894,814 6,186,093,806 6,298,745,128 6,427,135,487

Balance Sheet
Shareholders' equity
Issued and paid-up share capital 1,257,716,543 1,260,847,542 1,316,363,602 1,319,693,385 1,319,936,825 1,319,936,825 1,319,936,825 1,319,936,825
Share premium accounts 1,817,769,953 1,845,948,940 2,345,593,482 2,377,168,913 2,379,358,913 2,379,358,913 2,379,358,913 2,379,358,913
Retained earnings
Appropriated 107,700,000 131,000,000 131,636,360 131,969,339 146,449,093 146,449,093 146,449,093 146,449,093
Unappropriated 917,060,506 1,256,001,579 1,542,384,970 1,952,926,137 2,195,567,576 2,668,559,801 3,173,498,646 3,722,972,291
Other components of shareholders' equity 756,169,728 798,156,074 1,463,726,008 1,231,636,430 1,066,013,176 1,066,013,176 1,066,013,176 1,066,013,176
Total equity attributable to owners of the
parent 4,856,416,730 5,291,954,135 6,799,704,422 7,013,394,204 7,107,325,583 7,580,317,808 8,085,256,653 8,634,730,298
Non-controlling interests 1,556,252,530 1,723,780,500 2,429,666,894 2,354,059,267 2,268,160,793 2,268,160,793 2,268,160,793 2,268,160,793
Total shareholders' equity 6,412,669,260 7,015,734,635 9,229,371,316 9,367,453,471 9,375,486,376 9,848,478,601 10,353,417,446 10,902,891,091
Total liabilities and shareholders' equity 10,559,687,461 11,384,669,095 14,487,329,020 15,446,299,639 15,547,381,190 16,034,572,407 16,652,162,574 17,330,026,579

Income Statement
Income statement (Unit: THB) 2014 2015 2016 2017 2018 2019F 2020F 2021F
Sales 4,883,805,348 5,396,022,667 5,739,985,309 6,101,953,507 6,474,044,600 6,921,899,236 7,397,620,370 8,070,186,871
COGS 3,351,443,102 3,578,733,690 3,844,627,448 4,148,921,243 4,529,489,838 4,707,086,932 5,035,440,936 5,496,241,355
Gross profit 1,532,362,246 1,817,288,977 1,895,357,861 1,953,032,264 1,944,554,762 2,214,812,304 2,362,179,434 2,573,945,516
Other income 76,963,454 72,423,961 82,144,489 100,295,046 96,363,078 96,363,078 96,363,078 96,363,078
SG&A 679,086,440 751,270,868 859,312,782 870,331,506 913,722,545 985,332,008 1,053,050,887 1,148,790,695
Operating profit 930,239,260 1,138,442,070 1,118,189,568 1,182,995,804 1,127,195,295 1,325,843,375 1,405,491,625 1,521,517,899
Other recurring income 54,499,173 58,080,020 77,342,486 69,012,754 84,828,804 93,311,684 102,642,853 112,907,138
Share of profit of associates 58,597,179 58,618,837 17,765,174 160,952,801 15,623,584 62,311,515 62,311,515 62,311,515
EBITDA 1,172,693,333 1,593,458,338 1,582,772,811 1,810,536,059 1,640,187,531 1,956,078,226 2,085,953,048 2,250,032,379
Depreciation and amortization 319,417,527 338,317,411 369,475,583 397,574,700 412,539,848 474,611,652 515,507,055 553,295,827
EBIT 1,043,335,612 1,255,140,927 1,213,297,228 1,412,961,359 1,227,647,683 1,481,466,574 1,570,445,993 1,696,736,552
Interest expense 100,206,962 102,901,168 122,515,943 152,115,423 161,823,458 187,600,077 189,189,772 193,655,734
EBT 943,128,650 1,152,239,759 1,090,781,285 1,260,845,936 1,065,824,225 1,293,866,497 1,381,256,220 1,503,080,818
Taxes 170,398,992 211,167,967 224,978,146 196,320,703 189,415,821 233,832,451 249,625,853 271,642,455
Net income 772,729,658 941,071,792 865,803,139 1,064,525,233 876,408,404 1,060,034,046 1,131,630,367 1,231,438,362

Cash Flow Statement
Cash flow statement (Unit: THB) 2014 2015 2016 2017 2018 2019F 2020F 2021F
Net income 772,729,658 941,071,792 865,803,139 1,064,525,233 876,408,404 1,060,034,046 1,131,630,367 1,231,438,362
Depreciation and amortization 319,417,527 338,317,411 369,610,651 397,260,910 412,539,848 474,611,652 515,507,055 553,295,827
Change in working capital
Change in accounts receivable (168,057,645) 22,769,380 (44,777,455) (20,296,930) (164,801,731) 35,033,254 (44,167,870) (62,443,789)
Change in inventories (5,026,372) 6,599,641 (12,471,779) (14,217,738) (10,678,083) (10,442,235) (12,258,005) (17,202,451)
Change in accounts payable 24,625,890 11,980,405 17,161,802 21,712,599 2,333,392 37,358,870 24,308,736 34,114,021
Change in other current assets and current liabilities 5,888,673 (16,798,497) 54,238,120 (73,227,189) 81,857,663 (54,606,133) 0 0
Cash flow from operations 949,577,731 1,303,940,132 1,249,564,478 1,375,756,885 1,197,659,493 1,541,989,454 1,615,020,283 1,739,201,971
CAPEX (553,861,382) (690,917,997) (1,360,512,861) (1,076,558,438) (480,271,583) (1,027,058,908) (1,027,058,908) (1,027,058,908)
Long term loans to related party (3,985,000)
Other items (493,607,808) (183,251,819) (547,360,248) (330,202,285) (178,549,564)
Cash flow from investments (1,047,469,190) (874,169,816) (1,907,873,109) (1,406,760,723) (662,806,147) (1,027,058,908) (1,027,058,908) (1,027,058,908)
Debt financing 568,920,756 167,446,223 565,572,761 889,049,297 72,529,872 31,446,255 88,342,586 94,276,338
Cash received from paid-up for share capital 31,309,986 555,160,602 34,905,214 2,433,440
Dividend paid (377,315,007) (452,543,887) (429,224,449) (543,383,324) (574,210,674) (587,041,820) (626,691,523) (681,964,717)
Cash received from share payment 1,250,000 1,250,000 750,000
Other items (100,206,962) (102,901,168) (122,515,943) (152,115,423) (161,823,458)
Cash flow from financing 91,398,787 (355,438,846) 570,242,971 228,455,764 (660,320,820) (555,595,566) (538,348,937) (587,688,379)
Beginning cash balance 255,362,948 248,870,276 323,201,746 235,136,086 432,588,012 307,120,538 266,455,518 316,067,956
Net change in cash (6,492,672) 74,331,470 (88,065,660) 197,451,926 (125,467,474) -40,665,020 49,612,438 124,454,684
Ending cash balance 248,870,276 323,201,746 235,136,086 432,588,012 307,120,538 266,455,518 316,067,956 440,522,640

CAPEX
2014 2015 2016 2017 2018 2019F 2020F 2021F
Investment property
Beginning investment property 173,636,859 171,843,665 236,425,470 233,246,605 248,232,481 266,367,371 284,259,621
CAPEX -1 66,510,840 603,467 18,710,433 21,456,185 21,456,185 21,456,185
Depreciation 1,793,195 1,793,193 1,929,035 3,782,332 3,724,557 3,321,294 3,563,935 3,803,329
% of beginning investment property 1.03% 1.12% 1.60% 1.60% 1.34% 1.34% 1.34%
Ending investment property 173,636,859 171,843,665 236,425,470 233,246,605 248,232,481 266,367,371 284,259,621 301,912,476
PPE
Beginning PPE 3,969,255,248 4,405,255,215 5,376,779,656 6,042,589,361 6,125,498,640 6,659,744,768 7,153,369,353
CAPEX 766,379,230 1,332,507,282 1,053,989,582 486,355,867 1,000,000,000 1,000,000,000 1,000,000,000
Depreciation 312,665,375 330,379,263 360,982,841 388,179,877 403,446,588 465,753,872 506,375,415 543,908,288
% of beginning PPE 8.32% 8.19% 7.22% 6.68% 7.60% 7.60% 7.60%
Ending PPE 3,969,255,248 4,405,255,215 5,376,779,656 6,042,589,361 6,125,498,640 6,659,744,768 7,153,369,353 7,609,461,065
Intangible assets
Beginning intangible assets 13,025,622 15,295,673 12,062,564 10,341,646 11,746,660 11,812,898 11,847,917
CAPEX 8,415,006 3,330,598 3,891,573 6,773,717 5,602,724 5,602,724 5,602,724
Amortization 4,958,957 6,144,955 6,563,707 5,612,491 5,368,703 5,536,485 5,567,705 5,584,210
% of beginning intangible assets 47.18% 42.91% 46.53% 51.91% 47.13% 47.13% 47.13%
Ending intangible assets 13,025,622 15,295,673 12,062,564 10,341,646 11,746,660 11,812,898 11,847,917 11,866,430
Total CAPEX 774,794,235 1,402,348,720 1,058,484,622 511,840,017 1,027,058,908 1,027,058,908 1,027,058,908
Ending investment property - net 173,636,859 171,843,665 236,425,470 233,246,605 248,232,481 266,367,371 284,259,621 301,912,476
Ending PPE - net 3,969,255,248 4,405,255,215 5,376,779,656 6,042,589,361 6,125,498,640 6,659,744,768 7,153,369,353 7,609,461,065
Ending intangible assets - net 13,025,622 15,295,673 12,062,564 10,341,646 11,746,660 11,812,898 11,847,917 11,866,430
Total depreciation and amortization 319,417,527 338,317,411 369,475,583 397,574,700 412,539,848 474,611,652 515,507,055 553,295,827

Ratios
2014 2015 2016 2017 2018 2019F 2020F 2021F

Total operating revenue 4,960,768,802 5,468,446,628 5,822,129,798 6,202,248,553 6,570,407,678 7,018,262,314 7,493,983,448 8,166,549,949
Gross interest expense 100,206,962 102,901,168 122,515,943 152,115,423 161,823,458 187,600,077 189,189,772 193,655,734
Net income from operations 772,729,658 941,071,792 865,803,139 1,064,525,233 876,408,404 1,060,034,046 1,131,630,367 1,231,438,362
Funds from operations (FFO) 897,989,373 1,278,850,386 1,290,649,257 1,360,823,691 1,354,145,418 1,537,576,625 1,650,068,349 1,787,665,117
EBITDA 1,172,693,333 1,593,458,338 1,582,772,811 1,810,536,059 1,640,187,531 1,956,078,226 2,085,953,048 2,250,032,379
Capital expenditures 774,794,235 1,402,348,720 1,058,484,622 511,840,017 1,027,058,908 1,027,058,908 1,027,058,908
Total assets 10,559,687,461 11,384,669,095 14,487,329,020 15,446,299,639 15,547,381,190 16,034,572,407 16,652,162,574 17,330,026,579
Total debts 2,116,162,835 2,249,272,320 2,760,287,315 3,236,363,330 3,613,983,696 3,686,094,971 3,724,825,119 3,694,646,773
Shareholders' equity 6,412,669,260 7,015,734,635 9,229,371,316 9,367,453,471 9,375,486,376 9,848,478,601 10,353,417,446 10,902,891,091
Operating income before depreciation
and amortization as % of sales 24.01% 29.53% 27.57% 29.67% 25.33% 28.26% 28.20% 27.88%
EBITDA interest coverage 11.70 15.49 12.92 11.90 10.14 10.43 11.03 11.62
FFO/Total debt (%) 42.43% 56.86% 46.76% 42.05% 37.47% 41.71% 44.30% 48.39%
Total debt/capitalization (%) 24.81% 24.28% 23.02% 25.68% 27.82% 27.23% 26.46% 25.31%

Management
Education: Master of Engineering, Class of 1968, Chulalongkorn University
Relevant Training
Diploma, National Defence College, The Joint State - Private Sector Course, Batch 4414
Capital Market Academy (ACMA), Batch 15
Director Accreditation Program (DAP) 20/2004
"Organization Risk Management for Director" Program
"Increasing Your Corporate Value Through Effective Communication" Program
Work Experience
2016 - the present Director, Sikarin Public Company Limited
2013 - the present Director, Synphaet Company Limited
2013 - the present Director, Tippayabadin Company Limited
2012 - the present Director, Legacy Golf (Thailand) Company Limited
2009 - the present Director, Princeton Park Suites Company Limited
2008 - the present Vice Chairman of Executive Director, Chaophya Hospital Public Company Limited
2004 - the present Director, Dynasty Ceramic Public Company Limited
2004 - the present Director, Serirak Hospital Company Limited
Mr. Chaisith Viriyamettakul 2003 - the present Managing Director Vibhavadi Medical Center Public Company Limited
Chairman of the board / 2002 - the present Director, Lanna Hospital Chiang Mai Public Company Limited
1998 - the present Director/Executive Director Vibharam Hospital Company Limited
Managing Director
1983 - the present Chairman, Taparak Development Company Limited

Management
Maj.Gen. Suriya Phalakornkul

Chairman of the board
Maj. Gen. Suriya Phalakornkul, M.D. has been Chairman of Vibhavadi Medical Center
Public Co. Ltd., since January 16, 2018. Maj. Gen. Phalakornkul serve as the Vice
Chairman of the board and Chairman of the Executive Board of Vibhavadi Medical
Center Public Co. Ltd., until January 16, 2018.

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Hasadin Phonrabul Jidapa Srivaranun Kanokporn Navykarn

Kyung Jin Park Palita Varojpiputhn Prem Phansuriyanon Siramol Chaijindawat

VIBHAVADI MEDICAL CENTER PLC

Company Rating Issue Rating Outlook

Sound business profile Recovering financial Satisfactory credit

Situation Overview Analysis Performance Credit Analysis

1986 Establishment of company

Situation Overview Analysis Performance Credit Analysis

Operating Area Medical Service of Vibhavadi Hospital

● Brain and Nervous System Center

Source : Annual report / opp day

Situation Overview Analysis Performance Credit Analysis

Source : opp day

Situation Overview Analysis Performance Credit Analysis

95% of patients are Thai

Source : Annual report

Situation Overview Analysis Performance Credit Analysis

Management Position Key Directors

Situation Overview Analysis Performance Credit Analysis

Top 10 major shareholders @21 Mar 2019 Shares %

Mr.Chaiyasit Viriyamettakul 1,959,000,000 14.84

F&S 79 Company Limited 1,928,242,766 14.61

Synphaet Company Limited 1,167,239,166 8.84

Ramkhamhaeng Hospital Public Co., Ltd. 932,497,800 7.06

Chaophya Hospital Public Co., Ltd. 803,634,195 6.09

Vibharam Hospital Company Limited 564,043,133 4.27

Mr.Pijit Viriyamettakul 379,700,000 2.88

Situation Overview Analysis Performance Credit Analysis

Source : MOPH, Krungsri Research

Situation Overview Analysis Performance Credit Analysis

Core business: Consistently improve operations and develop services 2021

-Plan to open Vibharam Thonburi

Source : VIBHA 56-1 and Opp Day

Situation Overview Analysis Performance Credit Analysis

1.7 % Tertiary health care providers

➢ Adjusting strategies for Middle-income

Situation Overview Analysis Performance Credit Analysis

“low levels of risk since

Situation Overview Analysis Performance Credit Analysis

129.734 billion baht 403.476 billion baht 44.139 billion baht

Operates a hospital under Own and operate 45 Own and operate 12

Situation Overview Analysis Performance Credit Analysis

Aging Society Growth in Middle class Support from Government

➢ Elderly (age >60) will ➢ Middle-class with greater ➢ Beneficiary of government

Situation Overview Analysis Performance Credit Analysis

Labor Shortage High-Tech Intervention required

0.4 Doctors and Nurses

Source : World Health Organization (WHO)

Situation Overview Analysis Performance Credit Analysis

Sales from 2014 to 2018 Net Income from 2014 to 2018

EBITDA & EBIT Margin

90% occupancy rate in Lanna hospital

Lower revenue from rental and service

Source : Annual report

Situation Overview Analysis Performance Credit Analysis

Forecast of VIBHA Sales

Expansion of Core Business Growing demand Operation of new commercial zone

Increasing demand from aging 60 million baht of revenue support