Company Quarterly Earnings Update – TNH VN – Q2 2022

Summary of the Q2/2022 results of Thai Nguyen International General Hospital JSC  (TNH VN)

H1/2022 Results: Highlights

  • Net revenue has grown 12.4% y/y to VND207.5bn thanks to (1) an est.5.1% increase in the number of patients, and (2) a 7.3% growth from Covid tests. In Q2/2022, the pandemic was brought under control, with all operations of TNH returning to normal with 31% q/q growth as the total number of patients almost reached pre-Covid levels. Therefore, Q2’s gross margin met Q2/2021’s level of 48.8%. However, it could not cover the Q1’s gross margin decline (35.4%) due to (i) fewer patients during the epidemic in Thai Nguyen, and (ii) a hike in labor costs and related medical expenses during the vaccination campaigns. As a result, H1’s gross margin declined from 46.2% to 43.1%.
  • Revenue growth outpaced operating costs resulting in a 4.5% growth in operating profit to VND75.7bn. Furthermore, financial costs decline by 6.8% y/y due to lower long-term loans. All in all, the bottom line grew by 9.2% y/y, reaching VND54.4bn.


  • Project updates: the construction of Maternity and Ophthalmic Hospitals will start in Q4/2022, with operations commencing in Q3/2023 and Q4/2023, respectively. For Viet Yen GH in Bac Giang province: TNH is currently finalizing the last step to acquire a construction license before starting in early Q4/2022, followed by the operations in Q2/2024.
  • New issuance updates (2:1 @ VND20,000/share): TNH submitted their documents and await the State Securities Committee’s approval by the end of Q3/2022.
  • For 2022: in H2, TNH will achieve higher growth as (1) during Tet and other national holidays in H1, more patients seek medical treatment during H2, (2) there will be a rebound from last year’s low base due to the delay of annual employee health checkups of FDI enterprises and firms in Thai Nguyen and neighboring provinces during the pandemic in Q4/2021, (3) increases in healthcare fees from Aug 2022. As a result, 2022F net revenue and net profit forecasts are similar to our latest estimates of VND508bn (+23.4% y/y) and VND173bn (+22.4% y/y), respectively.
  • For 2023: net revenue is expected to grow 29.3% y/y to VND657bn thanks to (1) 17.4% growth in current hospitals and (2) contributions of Maternity and Ophthalmic hospitals. The gross margin will decline from 47.7% to 39.3% due to higher depreciation and direct employee expenses from these hospitals. All in all, 2023F net profit is expected to remain flat at VND174bn (unchanged vs our latest estimate).

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