Bumrungrad Hospital Public Company Limited (BH) Earnings Call Transcript & Summary

[Foreign Language] Welcome, everybody, to the second quarter and first half 2020 analyst presentation. As in the previous presentation we had in the previous quarter, the format of this presentation will be a recording, followed by a live Q&A session, which will be on the 13th in the morning. We are, as you know, still in the COVID era. And as a result, you could probably see when you looked at our financial performance, a large impact from the restriction on international travel and medical tourism to the hospital. Nevertheless, we remain adaptive. We remain responsive to current business environments and we have taken advantage of a number of things to roll out, which will help to improve hospital care and ultimately deliver shareholder value to you. Many -- one of the many things that we will be talking about in this presentation. Besides, of course, the financial performance will be on what the hospital is currently doing for telemedicine, which as you probably are aware, is increasingly ubiquitous across the world in delivering health care, especially in providing accessibility to patients who may not or does -- or cannot come to the hospital, given the current situation we have now. Moreover, we have been accelerating the deployment of genomics-related health care solutions, diagnostics, et cetera. And we will have presentations from Jeremy Ford, whom you may recall in the previous quarter, also delivered a presentation on that. We will expand on that in the upcoming session today as well. We also have been engaging in a number of heavy promotional campaigns to help bring patients to our hospital we are well aware that people currently are not willing or currently facing certain difficulties in coming to the hospital. We, as a hospital, want to come to them. We are ready to accept our patients and also to provide a sense of comfort, both financially and in a convenience wise fashion to meet this challenge in delivering health care in this new era. We also have a number of new executives joining the team, strengthening the current governance of the hospital and executing a number of plans that we have set both by the Board and also our Managing Director. And finally, you probably would like to know a bit more about how we are prepared as a hospital to receive patients on a limited basis. Working in conjunction with the Ministry of Public Health and Foreign Affairs in bringing patients over from overseas, specifically the Indochina region as we currently stand, are the countries that we mainly can receive patients from. And Dr. Thassanawut, who was newly appointed will be offering us some details on how we are well prepared for that. So without further ado, we will go into the presentation. And we, as usual, we'll start off with Mr. Neil Sorrentino, who will run through overall the performance of the hospital.

Thank you, Daniel. [Foreign Language] and welcome. Daniel covered a little bit about the effect of COVID. I need not remind anyone in the audience about the devastating impact that it's had around the world, not to mention the country of Thailand. Thailand is now approaching 14% to 15% GDP decline and by third-party reports, almost 20% decline in unemployment and 70% to 80% decline in exports, which has created a significant economic burden for the country. The government is doing as much as possible to try and balance the issue of political well-being of the country versus the health well-being of the country. But it's not an easy equation to solve. And the world generally has recognized that Thailand has done a good job on the one front, but like many economies in the world, it's impacted the economics very, very severely. And with Bumrungrad having 66% concentration of international revenue, you can well imagine and could have predicted that our revenue shortfall at that percentage level in Q2 with the full impact of both a sheltering in space, a lockdown, a curfew and the Ministry of Public Health mandating that no surgeries that are elected to be done in Thai hospitals, the collective impact of that to the revenue of an organization like ours displayed itself in Q2 quite prominently. You will note throughout these presentations that we are going to talk about what we've done in terms of our agile digital approach to medicine, not fortunately, but having planned, we began the digital transformation of our company last November of 2019, both building a digital platform, an online shopping platform. We invested over a year ago into a telemedicine company at the rate of 30%. And you'll hear later from one of our presenters, who has the responsibility to manage the telemedicine aspect of our business, you'll hear that we've done almost 4,000 telemedicine visits, which have resulted in a number of referrals, whether they be remote or whether they be direct on the campus. But mind you, the first part of Q2 for any health care provider, especially hospitals, there was great fear in the country about leaving their home and being exposed to COVID. As we approach the second half of Q2, we saw in the second and the third month of Q2, especially the second half of the second month and all of the third month of Q2, we saw a return of both the Thai business and the expat business driven almost predominantly by our digital platform and the many promotions and vouchers and programs that we felt we needed to implement to both remain agile, to generate revenue and to give Thai people and expats comfort that they could come to Bumrungrad and be safe, which was our single and most important thing. So let me go over some of the individual revenue drivers for the quarter. And the point of these few slides I'm going to show you is that if you look at this one as an example, the low point for our Thai patient revenues was in April at minus 33.5%. But as we move through the quarter, in comparison to Q2 '19, it slowed almost down by 2/3 to only 10% decline. And then at the end of the quarter, it actually crossed the volume actual for Q2 '19 in Q2 '20. And that is a function of all of the different promotions that I have just highlighted for you, you'll hear a great deal more about them in just a bit. Next slide, please. In the same way, the low point for the quarter was April at minus 21% for expat revenues. And then you see, as we come through May and as we hit the end of the quarter, we actually, again, with expat revenue crossed our volume and our revenue expectations that we had planned for and actual for 2019. The next slide talks about all international, and this is where the majority of our impact affected us in the quarter. If you look at April, and remember, this began the slide in March because the impact of COVID began happening at middle of February, you see the low point in April, it's 68.9% negative differential. And then through May, it slid 67%, about the same. And then you see a further slide, 67% to 71%. That further slide was from patients that were long-term care stay patients, Middle Eastern patients principally, who began getting well and were sent back home to their home country. Their governments would send private jets here to pick them up and take them back. Go back to that next slide. However, for the quarter, our international business, almost principally Middle Eastern business represented between 20% and 25% of our total volume in the hospital because of these long-stay care patients, principally from Kuwait and Qatar. Next slide. So here is the same here's the same evolution of the negative impact from the Middle Eastern business, the 39% to 53%, May to June, is that changeover patients being discharged and going back home. Next slide. Indochina, the very, very same way, a fairly precipitous drop in April, continuing through May and June. This is principally from Myanmar, where the travel ban employed by the government of Thailand impacted us very significantly, both Myanmar, Cambodia, but principally Myanmar, which is our largest referral office entity. Next slide. So while I would say to you that the international revenue for the quarter in terms of this decline was dramatic. We expect this to return. We expect the government of Thailand to start developing this balance between the health of the country versus the health of the people, and we're already seeing signs from the Ministry of Public Health and the Ministry of Foreign Affairs, talking about allowing some international patients to come to the country. There's already, I believe, 3 different countries that are now allowed to come into the country. One is China. What are the other 2, Daniel, do you recall?

Cambodia.

Cambodia.

And Laos.

And Laos. These are markets that are important to us. And we are in the process of working each one of these referral offices in a very, very significant way with our medical transport team, which Dr. Thassanawut is going to talk about later in the presentation. In addition to which, we have signaled and tested all of our referral markets around the world. And there's over 1,200 pings that we have counted of patients in all of these markets who want to come to Bumrungrad, waiting for the ability to get into the country. So I'm cautiously optimistic that, that while Q2 is what it is, given COVID. I'm cautiously optimistic that going forward, when the country opens up, it will reverse itself. The pace of which or the rate of which is unpredictable, because COVID is not just an issue in Thailand, it's an issue all over the world. And there are countries that are having surges. There are countries that are having sparks of upticks in both infections and death rates. And until those things settle down, where there's predictable trend downward. Both those countries are not going to allow people to leave and the country of Thailand, Kingdom of Thailand is not going to allow them to come here. So we'll see. We're not sure. At our 5 August Board meeting, our Board of Directors, led by our Chairman, Khun Chai Sophonpanich, took on the issue of the interim dividend for the shareholders of record. And at that meeting, the Board made the conscious and sober decision to allow 113% of a dividend payout, and let me explain that just for a moment. In 1H '19, the interim dividend payout was THB 1.15, you'll see that on the first line, 1H '19. And what the Board decided to disgorge was the same amount, THB 1.15, except that in '19, that THB 1.15 represented 46% of 1H EPS. In this case, in 1H '20, it represented 113%. So we disgorged 100% of the EPS for 1H. And in addition, another 13%, which came out of unappropriated retained earnings, for which the company as of June 30 had THB 17.7 billion of unappropriated retained earnings and the differential of 13% is a little over THB 100 million, out of that THB 17.7 billion. So it was de minimis in terms of what was coming out of the unappropriated retained earnings. But more importantly than that, with THB 8.3 billion in free cash flow, negative debt and the fact that our Board wanted to reward its long-standing and participating shareholders of record who have been quite loyal to the company over 40 years, we'll celebrating our 40th anniversary in September. They made the conscious decision to match the interim dividend that was given in 1H '19 to be replicated in 1H '20. We'll talk in this presentation about the digital transformation to procedure genomics medicine, which Jeremy Ford will discuss. We are looking at today, but we are spending and planning for tomorrow in the way we deliver health care. And that continues. And you'll hear a great deal more throughout this analyst presentation about what we're doing to deliver a whole different kind of medicines for patients in Thailand. And we've been talking about this to you for several quarters, we're just continuing this investment in the future. And in the way we genomically reach down to the molecular level of how it is we treat and diagnose patients here. I won't go into the issue about our balance sheet. Our balance sheet, as many of you know, who follow the company is fortress type. It's very, very strong. I mentioned to you in Q1 that we would get through this crisis, and we will. It's a crisis for everyone in this country, including all health care providers at some level or another. And with negative debt, we have a credit line unused of THB 20 billion. We don't intend on accessing it, but it's there if we need it. We have THB 8.3 billion of free cash flow, which I've mentioned. And while we have less cash from operations because of declines in revenue. We are, like every company, managing cash flow very, very carefully. As for the future, which is really the more important question here rather than Q2. Q2, by the way, I would -- for me, I would refer to it as an anomaly. I don't see Q3, and I don't see Q4 looking like Q2. Q2, in my mind, is probably the low point of FY 2020 because we've already seen an upsurge in our business at the back end of Q2. And I would tell you, unofficially, we continue to see that positive upsurge in Q3. But looking at long-term investments, and I will cover for Q3, our master plan update, but simply to say that we are continue in to execute to our master plan, and I'll give you a detailed update in Q3 analyst presentation. But let's look at a few of the things that we're doing long term in terms of how we're strategically deploying our money. Firstly, our investment committee and our Board based upon management recommendation has made the decision to invest in a New York-based company called Onegevity. Onegevity is a 2-year-old company with positive revenue and positive bottom line. That is a business intelligence wellness company. It is owned 45% by Thorne Nutraceuticals. A very highly respected long-term nutraceuticals company with a large amount of data. So what is this company for us? What's the business proposition for Bumrungrad to be involved in this company? Firstly, we're going to take this technology and continue to uplift the Vitallife. And you will hear, by the way, that Vitallife will be opening on a soft launch, our grand opening for Bangkrajao, Khun Artirat will be talking to you about that. So there's that for Onegevity in terms of a business proposition advantage, value proposition. Secondly, it has a commercial consumable aspect to it where there's precision analysis of those that are having to deal with the flora, the gut, the brain, biome, health and then prescribing very, very specific nutraceuticals that are targeted to help those patients. The third and probably the most exciting aspect of Onegevity for us is the -- is something in the advanced pharmaceutical world called drug repurposing. Drug repurposing for big pharma is another channel or branch of revenue generation, where the big pharma doesn't really have to go through the FDA in clinical trials and spending USD 1 billion to get FDA approval. They're looking for more shorter-term ways to generate revenue. And between Onegevity and Thorne, with all of this data collected because data is very, very, very valuable that data can be monetized for big pharma. And we're happy to be a part of Onegevity their Series A is about USD 10 million that they're trying to raise. So we have bought into about 20% of that at $2 million, and we should be closing that deal by the middle of Q4. We are -- we, management, have submitted to our Board, and they have approved a THB 65 million expenditure to raise a building that we own on the property that we own, Nana, and we're going to build a 6-story building there to take advantage of our growing retail pharmacy business. As well as take advantage of the fact that BMA, Bangkok Metropolitan Authority, has allowed us to build this much larger story, a 6-story building on this footprint. So we're going to take advantage of that. The Bumrungrad Health Network joint venture, we have discussed with you over the quarters, us continuing to develop that Bumrungrad healthcare network joint venture with principal health care. Our Board has agreed to set up and fund our portion of a joint venture with a separate structure between ourselves and one of our lead neurosurgeons who will be a part of that structure. And we've identified 6 sites now. The last time we spoke, it was 4. We've identified 6 sites to develop either joint or spine or both technology centers in those hospitals. And as I mentioned, we will have our grand opening, soft grand opening for Bangkrajao, Vitallife Scientific Wellness Center In October. I believe it's in the first week of October. To remind you, this is a development initially starting with 61 keys developed by M.K. Real Estate Development Company, being managed by Minor Anantara, not equity participant, but managing the process and we'll be on the campus as Vitallife. We're not invested equity wise in the villas. That's solely M.K. Real Estate Development Company. For Q3, with respect to guidance as I've mentioned to you earlier, while I wouldn't suggest that Q3 and Q4 is going to look anything like Q2 because for me, I think that's the bottom of the -- that's going to be the bottom of the performance cycle for us in 2020, but we're not able to give you, like Q2, we're not able to give you strong top line revenue guidance. And the reason is this, the country is still locked down. The airport is still closed. We have a lot of possibilities in the queue. But until we can get those patients here, we will have to rely on our domestic efforts, both for Thais and expats and some layover international patients, whether they be Middle Eastern patients or otherwise, until such time as we have better visibility on when COVID is going to be dealt with by the government in a very, very different way than they have to date. We expect that it will change. We're seeing some pretty good signs that they seem open to partially opening to countries that have low infection and low death rates. But suffice it to say, for Q3 and Q4, I do expect a significant bottom line performance improvement versus Q2. As Daniel mentioned earlier, we'll be conducting a live stream Q&A to take any and all questions. We'll spend about 1 hour or 1.5 hour or as long as you want to submit questions. And I think that's being done on the 13th of August at 10:30. So please join if you have questions, we'll be posting this presentation online, I believe, at the end of the business day on Tuesday, and I think that's the 11th of August, correct? So please look for that on our investor website. And with that, I will turn it back to Daniel.

Thank you, Neil.

Thank you.

So as usual, we will proceed to the financial highlights aspect of the presentation, and that will be presented by Khun Oraphan. So Khun Oraphan, thank you very much. Please continue.

[Foreign Language] Good morning, everyone. I would like to report you on the financial performance in second quarter and first half of 2020. The financial highlight, due to the highly disruptive impact of COVID-19 pandemic, including the national lockdown in Thailand and the travel ban in all international countries, including MOPH announced a reactive cash policy [indiscernible] , which impact the total volume significantly in second quarter of 2020. Revenue declined by 42.8%, mostly due to a decrease in revenue from Thai patients by 13% and non-Thai patients by 58.9%. EBITDA declined by 72.8% with EBITDA margin 12.9%, down from 27.1% in the same period last year. Net profit and diluted EPS down by 93.9% with net margin -- net profit margin 1.8%, down from 16.7% in second quarter of last year. For the performance in first half of 2020, revenue declined by 26.6%, mostly due to a decrease in revenue from Thai and non-Thai patients by 7.8% and 36.4%, respectively. EBITDA declined by 44.2% with EBITDA margin 23.6%, which was down from 30.9% in the same period last year. For the net profit and diluted EPS down 55.2% with net profit margin 12.2%, down from 19.9% in first half of last year. So we move on to see the detail of the total revenue. As the highly disruptive of COVID pandemic impact and national lockdown, as we have mentioned, international patient could not travel for medication. Total revenue in second quarter of 2020 was THB 2,487 million, declined by 42.8% from THB 4,348 million in second quarter last year. For the first half of 2020, the company reported total revenue THB 6,663 million, 26.6% decline year-over-year from THB 9,082 million in the same period last year. For the revenue contribution by nationality, due to the national lockdown and travel ban in our country, which caused the international patient could not fly in. Including, we have launched many promotions to stimulate local market and create many new activity and channel for patient access. We got good a feedback from Thai and expat patients, which could increase revenue contribution of Thai from 34% to 52% in second quarter of 2020 and up to 41% in first half of this year, increased from 33% in the same period last year. For the revenue contribution by service, in second quarter and first half of 2020, revenue intensity of in-patient service increase in critical care. So with cardio, neuro and length of stay increase in both of Thai and international patients. Revenue contribution from in-patient service increased to 54%, both of second quarter and first half of this year. For the revenue contribution by payer type, there were change in payer mix due to the COVID impact. Self-pay declined from 69% to 60% in first half of 2020. Mostly due to the decrease in revenue from international self-pay as the result of travel ban in international countries. Insurance contribution increased from 16% to 19% in first half this year. Due to the increase in Thai and expat insurance patient. For the government third-party contribution also increased from 13% to 19% in first half this year, mostly due to increased revenue from Middle East payer, especially revenue from Kuwait embassy increased by 45%. For EBITDA, according to the highly disruptive COVID impact situation, we have implemented many cost containment policy and activity in first half of 2020 low overtime, reduced part time, reduced outsource service, reduced marketing expenditure -- event, reduced traveling expense, allow outside training only the recreation requirement reduced expense by negotiation with the vendor or open a new building to lower the expense in many areas. We achieved a certain cost saving as planned in first half of 2020, which we will continue in our cost containment policy and looking for more in the second half of this year. However, there are fixed cost that could not flexible to the net revenue that decline, like software maintenance, license fee, mostly are the expenses to support the digital platform. For the EBITDA in second quarter of 2020 was THB 317 million declined by 72.8%. In first half of this year, EBITDA was THB 1,555 million declined by 44.2% from the same period last year. For the EBITDA margin in second quarter 2020 was 12.9% declined from 27.1%, and first half this year, EBITDA margin was 26.6%, declined from 30.9% in first half this year -- last year. For the net profit, declined the same as the EBITDA decline, except for there is the impact of the IFRS 16 about the lease, which start effective in 1st of January this year. This caused the interest expense and depreciation slightly increased. Net profit of second quarter 2020 was THB 44 million declined by 93.9%. And first half this year, net profit was THB 810 million declined by 55.2% from the same period last year. For the net profit margin, in second quarter 2020 was 1.8%, decline from 16.7% and first half of this year, net profit margin was 12.2%, declined from 19.9% in the same period last year. For the net debt-to-EBITDA in first half this year was 0.2x, slightly higher than last year due to less cash on hand and net debt. For the net debt-to-equity in first half was slightly above than last year due to the same reason, less cash on hand and net debt. However, when considered bond covenant requirement for net debt-to-EBITDA should be less than 3.25x and net debt-to-equity less than 1.75x. The current net debt-to-EBITDA and net debt-to-equity in first half 2020 was still a lot lower than bond covenant requirement. For the interest coverage ratio in first half 2020 dropped to 23.7x due to less EBITDA in first half this year. These are all the financial performance in second quarter and first half of this year. Thank you.

Thank you, Khun Oraphan. So now we will have the business update section of the presentation. And Khun Artirat, our CEO, will be presenting some of the exciting promotions that we've been having and actually also rather successful promotions that have generated new patients coming to the hospital as well as our 40th anniversary and how we're planning to celebrate that and as well as that, introduce new executives that I mentioned earlier in the presentation, who have joined the team and will strengthen execution going forward. Thank you, Khun Ling. Please?

Thank you, Daniel. So [Foreign Language]. Good morning, ladies and gentlemen. It's nice to meeting all of you again. Today, I would like to present the update of the Bumrungrad Hospitals. Since the COVID-19 crisis, we have carefully reviewed and look forward to the business opportunities and benefits under the crisis situation. First of all, we have reorganized and appointed the new members in our executive team to strengthen our hospital services. So the first one I would like to introduce is Dr. Winyou Ratanachai. He serve Bumrungrad as an orthopedic surgeon. And right now, Dr. Winyou has been appointed to be our Medical Director since 1st of July this year. Dr. Winyou will be the Bumrungrad ambassador represent our hospital in the advanced medical services. He will build the relationship and networking with third-party such as government sponsor, embassy and insurance companies. The second one is Dr. Taveesin Tanprayoon. Dr. Taveesin joined Bumrungrad since the hospital newly opened. So his service here right now is nearly 40 years. So he is the surgeon and has been appointed to be Chief Medical Officer. He will liaison with the medical staff and building the engagement among medical staff and other health care professional team. He will maintain the quality, safety standard of patient care. And he and his team already implemented utilization management functions that in line with its goal to operate with accountability, transparency and fairness in accordance with the principal of good governance and ethics. He is also joining the strategic planning and development with the hospital management team. The next one is Dr. Nipat Kulabkaw. Dr. Nipat had experience in medical assistant company he joined Bumrungrad as the Ancillary Director and moving to various medical functions, such as medical coordination office, medical transport and business functions such as insurance operations. Right now, he has been appointed to be Chief Business Development Officer, International. The next one is Khun Puttarapong Kanpukdee. This is the good talent management programs of Bumrungrad Hospital. Khun Puttarapong joined Bumrungrad since he graduated from the university as the clinical pharmacist. He started his management role in pharmacy director and leading the strategic business unit such as health screening center, oncology center or cancer center, DDC or GI center and also support Vitallife Scientific Wellness Center business. Right now, Khun Puttarapong has been appointed to be Chief Business Development Officer domestic. The last one is Khun Somsak Vivattanasinchai. Khun Somsak had experience in many industries as the Chief Financial Officer. And right now, he came back to Bumrungrad as the Chief Executive Officer of Bumrungrad Health Network. He will be responsible for the excellence center expansion in our Bumrungrad Health Network, strengthen deferral system with our Bumrungrad Health Network and also support in the new business expansion projects. I would like to show you the very successful promotional campaign that we just rolled out in early of May. Buy one get one, as you can see the slogan in the poster and also Bumrungrad health fair at Central Embassy last month. We got a very good revenue and achieved 4,500 packages sold with the new patient, 51% growth compared to last year. This is also the very successful promotional campaign under the fixed price campaign. The first one is ReLEx SMILE. This is to help the patients who have the better eyesight and also many procedures such as the robotic surgery and laparoscopy. We got more than 300 packages of ReLEx SMILE compared to only 41 package, the same period of the previous year. And now from our service of 40 years, our hospital is the world medical destination and has a very strong and focus on quality and safety standard. We set the attainable price campaigns to expand good health among our patients with our gratitude and gain the status of clinical excellence and collaboration of expertise that we never stop improving to be the leader in medical services. Moreover, we offer the 40% discount on the room charge and 20% for items, which are laboratory medicine, medical supply and imaging services. For loyalty customers, we have extended 50% discount on the room charge and 20% as same as the domestic customer. And in order to celebrate our 40th anniversary we offer gift voucher value THB 4,000 to our 300,000 loyalty patients as well. For the partnership program, we have partnered with The 1 card of Central Group for point redemption. Value as money which the patients or the customer can be used to collect in both Bumrungrad Hospital and also Vitallife. This is the good alternative to spend and earned their points. The next partnership program is the Bumrungrad, together with Bangkok Life Assurance. We created the programs we call 2B Care Privilege and cancer max programs to our valuable customers. Bumrungrad offer premium services, teleconsultation and fixed price programs through Bangkok Life Assurance and also the special package for the one who bought insurance and they got cancer, and they can come to use our cancer center services. The next one, during the impact from COVID-19 all over the world, we use our expertise, and we are accepted to support the official alternative state quarantine, collaborating with 6 hotels right now, and more and more hotels will join us later. Last but not least, we never stopped the good projects. To benefit our customers, we move on developing the Bangkrajao project, which will be soft launched in October this year. This is a very good project to level up the luxury care and wellness tourism in Thailand to be attractive to domestic and foreign customers. All in all, we know that this is a very tough situation for international market. Therefore, we will focus on building more business with domestic markets and maintain our good quality medical services, develop the competent health care professional team and also continue to explore the advanced technology. Thank you very much for your time and kind attention. [Foreign Language]

Thank you, Khun Ling. Now we will have a presentation by Dr. Thassanawut, who is our Director for Medical Transport, who is leading the hospital in managing health care and quarantine procedures, bringing patients in from overseas to the hospital under very challenging restrictions and requirements as of the -- from the Ministry of Public Health.

Good morning, everyone. I'm Dr. Thassanawut Dhearapanya, Division Director of Medical Transport, Bumrungrad International Hospital. I'm so delighted and happy to be here with you all today. I'd like to introduce how we were coping with this difficulty in the COVID-19 era. It's inevitable that the country have been locked down. And up till now, the lockdown is still in effect. However, we are trying our best and every measure to try to bring the patient who is in need of immediate medical care for their difficult medical condition to come into Thailand and provide them with the state-of-the-art health care and also the quarantine that is imposed by the Thai authorities. I'd like to go through the quarantine facility here a little bit. In Thailand, everyone who arrives regardless of their nationality, Thai and foreign alike. They have to go through the compulsory quarantine for 14 days. I'll go through that later in details. But the quarantine facilities, as you can see here, categorized into home quarantine, local quarantine along the borders, state quarantine and alternative state quarantine. I'll touch base with these state and alternative state quarantine here a little bit. For state quarantine is basically the hotel that have been designated by the government to take care of the patient -- of the people who arrive from abroad. It's free of charge, but they cannot choose where they will be. On the other hand, people who wanted to be a little bit upgraded in terms of care, food and rooms can opt to stay in what we call alternative state quarantine. Alternative state quarantine is the hotels where they have been inspected for their preparedness and also for infectious control. Of course, people who opt to stay in the alternative state quarantine have to pay on their own. This is a little bit away from what we are doing. We come closer to the hospital. There is a facility that is called hospital quarantine. For hospital quarantine is a public hospital where they accept the patient who arrive from abroad who needs immediate medical care upon arrival. For hospital quarantine itself, it's basically the public ones and is free of charge, mainly aimed to treat Thai and expats. Last but not least, the one that we are involving the most is the alternative hospital quarantine. For alternative hospital quarantine, people who need for immediate medical care upon arrival, they can come directly from the airport or from the border to our hospital. And Bumrungrad Hospital has been declared and certified by the Ministry of Public Health as one of the facilities to be the alternative hospital guarantee. We have to understand who are permitted or who had permission to come into Thailand during this period of time. We rely on the Royal Gazette that had been published on the 31st of July 2020, as our latest information and resource. People who arrive from abroad have been categorized into 11 groups. While Thai nationals in group 1, of course. And groups 2 down to group 11 are foreign nationals, who can be coming and entered the Kingdom of Thailand up to different categories and different conditions. We focus on group 2 and group 10, who are patients seeking for medical care in Thailand. Once arrived in Bangkok and come to Bumrungrad International Hospital, as you can see up here, we have the protocol for quarantine in place. Everyone has to undergo the mandatory quarantine for 14 plus 2 days. I said 14 plus 2 because the first day that they arrive, it's referred to as day 0. And the next day is counted as day 1. And at the end of the quarantine, day 14 must be completed. So the patients and their companions have to undergo the quarantine for 16 days and 15 nights in effective. The patients are only allowed to leave the room for their medical procedure and investigation only, while their companions remain in the room throughout the quarantine. One patient can come with only 3 companions max. Fever and respiratory tract symptoms are being monitored on a daily basis. And of course, the COVID-19 tests would be obtained on 3 occasions. First, on day 0, that they arrive; second, 1 week apart on day 7; and the last one to make sure that the patient and their companions are COVID-free, the third one is obtained on day 14 to ensure safety of themselves and everyone around them. Last but not least, if they are proved to be positive or detected with COVID-19, they will be cared for in our facility, Bumrungrad International Hospital. Thank you.

Thank you, Dr. Thassanawut. Now we'll have a presentation from Dr. Isorn, our Senior Clinical Director for ICU, Telemedicine and Home Care and Cardiology. He will be presenting to you about the dynamics of telemedicine as it currently stands in health care and why we, as a hospital are embracing telemedicine, enhancing its services, for the future of health care. Dr. Isorn, please?

[Foreign Language] My name is Dr. Isorn Sookwanish. I am Senior Clinical Director at Bumrungrad International Hospital. I'm overseeing critical care, cardiology, telemedicine and home health care. So today, I would like to share our vision about telemedicine. We don't see the telemedicine just new technology to improve our care, but we believe that it's going to change the way we care the patient forever is going to disrupt this health care industry. In medicine, we always keep improving over 100 years. So now we have reached the point where we can treat the disease one untreatable or at least turn acute fatal disease into chronic and manageable one. But the consequences of doing so, now the care is so complicated, this makes it high cost and inaccessible, we need a lot of specialists and sophisticated imaging technology along with sophisticated laboratory. So only large facility can have it, and that's caused the problem, of course, and the accessibility of the patient. So now with the technology of telemedicine, we believe the future of health care will be lower cost, higher accessibility. By decentralized the thing where we -- the treatment that one have to be in the hospital in the future can be done in other facilities or even the patient's home and also the -- along with the AI, we can help to multiply the force of our clinician and use the one-to-many model to make it more accessible for the patient. So in health care industry everywhere in the world, including Thailand, there is -- we can separate into 3 tier of patients. The first tier is the simple disease where the treatment is quite simple. And the second one is more complicated, but the standard treatment is available. And the last one or the highest one is complex and intuitive. It required the team of specialists and sophisticated technology, and the treatment has to depend on the experience and the training of specialists. So Bumrungrad Hospital are capable for treating every needs of the patient. And our strength is to deal with the most complex and difficult cases. But also, we're also aware of the new provider entering into this industry. More and more, they keep improving as well. So we're still outstanding in complex disease, but we see the risk that many patients, especially for simple disease, can -- we can lose that kind of patient. But with the new technology that we are implementing now, first is a telemedicine. It will help the patient to see the doctor anytime, anywhere. And the second is the decentralized testing like imaging and laboratory, that means the investigation that once have to do in our -- in the last facility, can be done outside the facility like in the clinic or even in patient's home. And the last one is decision support to powering by AI. That will help our clinician to see more and more patients without compromising the standard and the quality of care. That mean in the future, we will be able to decentralize our care. The thing that have to be done in our hospital may be able to do it in other facility or even the patient's home. And we can see more and more patients. So since the 5th of March this year, we have launched telemedicine hospital-wide to respond to the surging needs of COVID pandemic situation. We provide -- initially, we provide 3 types of services. Teleconsultation, that the patient and the doctor can see each other without having to come to the hospital. The second is at-home service, we can take some sample to do investigation in our hospital. And the last one is refill medication drug delivery. So the patient can receive their medicine at their home. After we implement, so far, we have more than 3,000 patients use this telemedicine service. And because we decide this service to be easy to use and patient-centric, it can be even for the patient that's aging and not familiar to the technology can use it easily. So majority of the patients that are using this technology -- this service is more than -- at the age more than 60 years old. And in the near future, now we are trying -- we are doing the thing that we call Bumrungrad at-home service, that means in the future, even in the patient that need to stay in hospital for continuous monitoring and treatment, they can discharge and go back to their home or any facility. But we still keep monitoring them by the device that we'll send all the biometric data to our command center. And we will have the clinician who are monitoring it and with the help of AI system, we can ensure the quality and safety of our care and whenever the patient needs any special attention, so we can forward the case to our physicians. Our physicians can contact the patient maybe by telemedicine, can be -- can send our team to patient facility on-site treatment or even take the patient by our ambulance and that data can be shared with the family and the caregiver as well because in the future, we believe that more and more the patient and caregiver will be important part of the treatment. Thank you.

Thank you, Dr. Isorn. Now we'll have a presentation from Jeremy Ford, our Director of Research, Clinic Laboratory and Technology. Jeremy will be running through similar to what we had in the previous quarter on how we are embracing disruptive technology for the benefit of the organization and delivering greater shareholder value to you. So Jeremy, please?

[Foreign Language] Ladies and gentlemen, my name is Jeremy Ford. I'm a Director, Laboratory, Technology and Research at Bumrungrad International Hospital. I want to just talk very briefly with you about disruptive technologies in health care. It's been listed by sort of several management organizations and analysis companies that disruptive technologies -- they've listed 12 technologies, which are going to have a large impact on business in the next decade. Now our view is that they can be disruptive if you let them be disruptive, but if you're unprepared, they will be disruptive. But if you adopt them and you're prepared and you take them into your organization and your strategies, they actually can help to grow your business. So we believe in being prepared and not being reactive. We've incorporated a lot of these technologies into our business already and I want to just show you some examples of what we've done, how it fits in with our strategy and what we're in the process of doing. I want to just come back to this slide, which is just remind you a little bit of the last time or the last meeting and the last time I left you with the concept of the digital twin. It is a very important concept. We are building a digital twin that allows us to be able to deliver care for you at a -- in a precision way. So a digital twin, I want to just reemphasize that concept to you, refresh your mind. At Bumrungrad, within this context, 3 of the themes that I want to bring to your attention is that we are committed to use cutting-edge technology in the delivery of our services. We are committed to doing -- to identifying, quantifying and predicting risk so that we can treat, mitigate and rejuvenate you, but we want to do that by using novel technologies and particularly at a genomic and genetic level. And then the other third theme that I want to just focus on very briefly is leveraging technology to deliver a digitally transformed organization. So I want to just present the disruptive technologies in that context. And 12 disruptive technologies have been listed, but we think that there are 9, which are relevant, particularly to health care, robotics, virtual augment or virtual and augmented reality. These fit into the theme of cutting-edge technology to deliver services. So we're already got quite a few robots, which are delivering surgical services. And we're in the process of rolling out some next-generation laboratory and pharmacy robots. And within the field of virtual and augmented reality, we've already sort of got active programs running to surgical planning which allows for surgical support, but also training and education of our professional teams. And also, we've got education programs running for -- in process for patients. The next big theme that I want to just touch on is genomics. We have got an established core genomics facility here at Bumrungrad, where we do the whole range of genomic testing right from the sample processing to the pipelines, the informatics and the reporting. And we've rolled out sort of pharmacogenomics programs since this year, in this year, and this is a full clinical pharmacogenomics program, which our clinicians have independently voted as being best-in-class. It was align to the Mayo program. It's a full clinical genomics program, which advises and assist our clinicians, making sure that the right treatment is selected for the right patient based upon their genomic profile. We've also done a nutrigenomics program, which is doing the same sort of thing, but with nutrition, exercise and weight loss, weight management and things like that, looking at a genomic level. And we've also rolled out scientific DNA wellness program, which is looking at risk factors at an organ-based level. It allows us to advise at -- based upon your profile, individual profile or patient's individual profile, it allows us to sort of advise about the best ways to mitigate disease, the development of disease. In process, we're looking at metagenomics programs. Metagenomics is quite complex area, but it's very, very -- it's growing very quickly. And metagenomics is looking at microorganisms throughout the body in communities. So might be able to relate more to the term microbiomes. There's a lot of press about microbiomes, particularly gut microbiome. Gut microbiome has been listed as the gut is the second brain because of the gut microbiome. It's very complex analysis. We are in the process of putting together some programs, which will allow for both clinical and wellness microbiome analysis and treatments, not just gut, but at other organs of the body as well. We're very committed to stem cell programs. We think that stem cells are going to revolutionize our clinical practice, both within a disease state, clinical disease states and also wellness. Precision oncology. We've already got quite a lot of precision oncology programs running, but we want to expand those because we want to make sure that you, with your tumor, gets the right -- get the right drug for you based upon the genomic profile of the tumor. So we're expanding those services using big data analysis and research, a lot of research application -- research investigations. And the final theme that I want to just touch on is the leveraging of technology, which is the digitization of the organization. AI, big data, cloud technology, Internet of Things and telemedicine all being identified as disruptors. We've already embedded all these things into our organization. We've got cloud computing platform. We've got a big data platform where all our analytical, granular data goes into a big data platform in a structured way that allows us to analyze and report based upon that big data platform. We've rolled out a telemedicine program in the last 3 months with Phase I completed very successfully. We're on rapid deployment of Phase II and expanding those services very, very extensively. We're using a lot of AI. We've already rolled out a lot of imaging AI tools for chest X-ray, for example, mammograms, which are revolutionizing the way that we deliver our services, not just from a diagnostic point of view, but a triage and are supportive so that we make sure we're able to deliver the services, high-quality services in a shorter time and more assured with a more assured feeling. And then we also rolled out our wellness expert adviser, which is based upon our extensive experience within the wellness field. We've pulled all this best -- all this practicing. We're trying to establish best practice and apply AI to it so that we're able to generate a well less adviser. In process towards the end of the year, we will have rolled out a world-class digital pathology solution, fully pathology PACS compliant, DICOM compliant PACS. So I mean, this is very exciting. One of the very few in the region. It will allow us to further develop AI. And then our Internet of Things platform, we're well advanced with establishing Internet of Things and the Internet -- our vision with Internet of Things is to be able to deliver remote monitoring in the concept of remote monitoring within the hospital, but also remote monitoring at home, remote monitoring via clinics, via partner hospitals, via partner organizations, anywhere, anytime. So well, all this is driving towards digitization and it allows us to deliver on our vision. If we're building a digital twin to be able to come in to support Bumrungrad anywhere, anytime, which is a digital smart health hub and it allows us to deliver all this, all our services remotely, whether it's at Bumrungrad, whether it's within Thailand, clinics, hospitals, homes or internationally. Thank you.

Thank you, Jeremy. So this concludes the second quarter and first half analyst presentation. We will see you very, very soon at the live Q&A session on the 13th of August at 10:30 in the morning. So please feel free to think of any questions you may have and submit that to the Investor Relations department. Thank you very much. [Foreign Language]