Thailand's Thonburi Hospital Group is planning to raise about 8 billion baht ($225 million) in an initial public offering next year that could make it the third-largest listed healthcare stock in Thailand, the group's chairman said.
Thonburi has two general hospitals in Bangkok and in the past 10 years has expanded into China. It is seeking to expand in Southeast Asia.
Thonburi's listing plans comes amid a boom in the Thai healthcare industry, where merger and acquisition activity have boosted stock valuations to nearly triple the forward earnings multiple for the benchmark Thai stock index, according to Thomson Reuters data.
The hospital group plans to list in the fourth quarter next year, chairman and founder Boon Vanasin told Reuters on Wednesday.
The cash will mostly fund domestic expansion, and the remainder will go to expansion in China and Myanmar, Boon said.
The group had originally planned to list its shares to raise capital last year but reduced its fundraising target after getting favourable loan terms for investments in China and Myanmar, Boon said. Thonburi had initially aimed to raise 10 billion baht.
"The Thai healthcare is still a rising sector but it's too crowded now. We see better growth in neighbouring markets like China and Myanmar," he said.
"If you look over the past two years, growth in patients from Myanmar in terms of visits was very strong. The healthcare demand is very promising there," he said.
The hospital signed a memorandum of understanding in 2014 with property group Aung Shwe Thee International in Myanmar to jointly build a private hospital there.
Healthcare shares in Thailand trade on an average forward earnings multiple of around 40.9, above the broader market's 15.2 average.
The preliminary valuation of Thonburi would give it a valuation at around 35 times earnings, Boon said.
Shares of Bangkok Dusit Medical Service Plc, the biggest hospital firm by market capitalisation, trade on about 38.6 times forward earnings, with second ranked Bumrungrad Hospital Plc trading on a multiple of around 45.2 times earnings, according to Thomson Reuters data.
