Subject: Management discussion and analysis for the second quarter and the six months ended June 30, 2008

Bangkok Dusit Medical Services Public Company Limited would like to clarify the principal changes in the reviewed consolidated financial results for the second quarter ("2Q08") and the six months ended June 30, 2008 ("1H08").

The Company recorded a consolidated net profit of Baht 339 million; an increase of Baht 216 million (175% yoy) from 2Q07. The summarized performance is as follows:-

- Total revenues for 2Q08 were Baht 5,246 million, an increase of Baht 869 million or 20% from 2Q07 due mainly to the continued growth in revenue from hospital operations which inpatient revenues grew by 27% yoy while the outpatient revenues increased by 14% yoy. For nationality of the patients, Thai patient grew 18% yoy while the international patients grew 24% yoy resulting in revenue proportion between Thai and international patients to be approximately 65%:35% in 2Q08. In addition, share of profit from investments accounted for under equity method also increased from Baht 5 million to Baht 40 million or 637% as a result of investment in Ramkhamhaeng Hospital Public Co., Ltd ("RAM") which contributed Baht 35 million in 2Q08.

- The Company reported cost of hospital operation of Baht 2,859 million, an increase of Baht 383 million or 15% yoy. However, an increase in cost of hospital operation is still at the slower pace than the growth in revenue from hospital operations resulting in the rise in the gross margin from 42% in 2Q07 to 44% in 2Q08.

- The administrative expenses were Baht 1,167 million in 2Q08, an increase of Baht 152 million or 15% yoy as a result of an increase in revenue from the hospital operation, together with the rise in personnel expenses as part of the cost of living adjustments in light of the rising inflation. However, the Company's operating efficiency has improved when compared with 2Q07. Core EBITDA (Core EBITDA is revenue from hospital operation less cost of hospital operations and administrative expenses) increased from Baht 784 million in 2Q07 to Baht 1,087 million in 2Q08 together with the core EBITDA margin grew from 18% in 2Q07 to 21% in 2Q08 due mainly to robust growth in the revenue from hospital operations while cost of hospital operation and administrative expenses grew at a much slower pace.

- The depreciation and amortization expenses were Baht 544 million, up Baht 88 million or 19 % yoy due mainly to renovation of hospital buildings and purchase of new medical equipments to support the growing demand of the patients. The Core EBIT(Core EBIT is Core EBITDA less depreciation and amortization expenses.), on the contrary, improved significantly from Baht 328 million to Baht 543 million while the core EBIT margin increased from 8% to 11%.

- Interest expenses decreased from Baht 175 million to Baht 146 million or 17% yoy as a result of the loan refinancing in 1Q08 that the Company refinanced its secured debt of Baht 7,167 million with Baht 3,500 million of unsecured long-term loan and Baht 5,000 million of unsecured debentures.

As a result of strong profitability, the Company recorded a consolidated net profit of Baht 339 million; an increase of Baht 216 million (175% yoy) from 2Q07, the net profit margin increased from 3% in 2Q07 to 6% in 2Q08 and the basic earning per share for the quarter improved from Baht 0.10 in 2Q07 to Baht 0.28 in 2Q08 or up 168%. For the first half of 2008 ("1H08"), the Company recorded a consolidated net profit of Baht 1,036 million; an increase of Baht 490 million (90% yoy) from the first half of 2007("1H07"). The summarized performance is as follows:-

-Total revenues for 1H08 were Baht 10,822 million, an increase of 19% from 1H07. The increase is as a result of 24% growth in the inpatient revenues and 14% growth in the outpatient revenues. For nationality of the patients, Thai patient grew 15% yoy while the international patients increased 24% yoy resulting in revenue proportion between Thai and international patients to be approximately 62%:38% in 1H08. In addition, share of profit from investments accounted for under equity method also increased from Baht 7 million to Baht 86 million or 1,185% as a result of investment in Ramkhamhaeng Hospital Public Co., Ltd ("RAM") which contributed Baht 77 million in 1H08.

- The Company reported cost of hospital operation of Baht 5,741 million, an increase of 15% yoy. However, an increase in cost of hospital operation is still at the slower pace than the growth in revenue from hospital operations resulting in the rise in the gross margin from 44% in 1H07 to 45% in 1H08.

- The administrative expenses were Baht 2,268 million in 1H08, an increase of 13% yoy as a result of the increase in revenue from the hospital operation, together with the rise in personnel expenses as part of the cost of living adjustments in light of the rising inflation. However, the Company's operating efficiency has improved when compared with 1H07. Core EBITDA increased from Baht 1,920 million in 1H07 to Baht 2,504 million in 1H08 together with the core EBITDA margin grew from 22% in 1H07 to 24% in 1H08 due mainly to robust growth in the revenue from hospital operations while cost of hospital operation and administrative expenses grew at a much slower pace.

- The depreciation and amortization expenses were Baht 1,061 million, up 19% yoy due mainly to renovation of hospital buildings and purchase of new medical equipments to support the growing demand of the patients. The Core EBIT , on the contrary, improved significantly from Baht 1,029 million to Baht 1,442 million while the core EBIT margin improved significantly from 12% in 1H07 to 14% in 1H08.

- Interest expenses decreased to Baht 312 million or 16% yoy as a result of the loan refinancing in 1Q08. As a result, the Company recorded a consolidated net profit of Baht 1,036 million; an increase of Baht 490 million (90% yoy) from 1H07, the net profit margin increased from 6% in 1H07 to 10% in 1H08 and the basic earning per share for the quarter increased from Baht 0.46 in 1H07 to Baht 0.85 in 1H08 or up 85%.

The consolidated financial position of the Company and its subsidiaries as of June 30, 2008 : The Company and its subsidiaries had total assets of Baht 27,864 million, an increase of Baht 1,632 million or 6% from the year ended 2007 due mainly to an increase in cash and cash equivalent of Baht 1,007 million. In addition, the investment in associated companies also increased from Baht 943 million as of December 31, 2007 to Baht 1,688 million as of June 30, 2008 due mainly to additional investment of 1.45 million shares at Baht 480 per share totaling Baht 694.43 million in RAM during the 1Q08 together with the share of profits under the equity method. As a result, the Company increased the percentage of shareholding in RAM from 26.18% to 38.24%.

Total consolidated liabilities as of June 30, 2008 were Baht 15,680 million, an increase of Baht 1,159 million or 8% from the year ended 2007 due mainly to loan refinancing during 1Q08. However, total debt to equity remained unchanged at approximately 1.0x from the year ended 2007 to June 30, 2008.

Total consolidated shareholders' equity(excluding equity attributable to minority shareholders of subsidiaries) were Baht 11,565 million, increased by Baht 451 million or 4% from the year ended 2007. This was due mainly to the net profit during 1H08 of Baht 1,036 million, offset with dividend payment of Baht 607 million

The Company and its subsidiaries' net cash flows from operating activities for 1H08 were Baht 2,326 million, increased by Baht 626 million from 1H07 due mainly to the profits from operations. Net cash used in investing activities were Baht 1,614 million, decrease by Baht 21 million as a result of decrease in purchase of fixed assets, netted off with an increase in the additional investment in RAM. Net cash from financing activities increased by Baht 378 million due mainly to the loan refinancing. Consequently, cash and cash equivalents increased to Baht 1,971 million as at 30 June 2008 from Baht 1,083 million as at 31 December 2007.

Bangkok Hospital Medical Center, 2 Soi Soonvijai 7, New Petchaburi Rd., Bangkok, Thailand 10310 Tel.(+66) 2310-3102

Management discussion and analysis for 2nd quarter 2008