Mr. Chaiyapat Paitoon, Chief Financial Officer of Minor International Public Company Limited (SET: MINT), expressed his confidence in the company’s business outlook from strong performance of its hotel business in Europe and Thailand.
There have been some concerns of the current debt the company is holding, causing its share price to trend downward. However, the CFO stated that with strong cash flow of the company, it had utilized cash from its European and Thailand’s businesses to reduce its debt in December last year.
The hotel business in Thailand is growing strongly with occupancy rate in December 2023 reaching 75%. Meanwhile, the average daily rate showed 10% growth compared to the year before. This is a significant growth in occupancy rates and average nightly room rates compared to both 2022 and the pre-COVID period in 2019.
This strong operating outlook will continue to generate cash flows that will significantly reduce the net interest-bearing debt to equity ratio from 1x as of the end of 2023, resulting in lower interest burden and increased net profit.
Kiatnakin Phatra Securities and Kasikorn Securities chose MINT as its top pick among tourism stocks from the trend of its profit growth in 2024, which is a result of increasing travel demand in Europe and Thailand along with positive factors from the support of the free permanent Thai-Chinese visa measure.
Analysts noted that MINT’s share price still has an upside and there could be some speculation on a free visa for Indian and Taiwanese travellers as well. More importantly, the share price of MINT is trading at a lower valuation than its peers with current EV/EBITDA at 8x, compared to 11x of its peers and 13x of the historical average of MINT.
Additionally, the consensus from LSEG showed 14 out of 15 analysts giving “BUY” recommendations on MINT and one more “Hold” recommendation. The consensus target price is at THB39.67, reflecting a 44% upside from the current trading price.
