The hotel segment of Minor International Public Company Limited (SET: MINT) has seen a significant recovery in 2022 from its pandemic low, supported by its strategic plan to optimize room rates of luxury hotels, according to the company’s chief financial officer.
Mr. Chaiyapat Paitoon, Chief Financial Officer of MINT, told Kaohoon that hotel business under MINT in more than 50 countries including Europe, Australia, Maldives, Middle East and Thailand has seen an increase in travel activity and hotel booking since late 2021 after the pandemic started to ease, while seeing a significant rebound in 2022.
Minor Hotel has the ability to adjust room rates for upscale hotels, leading to higher income when occupancy rates spike.
MINT recorded more than 80% growth for its revenue in the first nine months of 2022, while net profit made a turnaround to positive territory over two billion baht. A recovery in economic activity was benefiting from easing of Covid restrictions, seeing a higher number of dine-in customers.
The CFO expected to see a positive outlook for MINT’s 2022 earnings and continuous growth afterward, seeing positive trends in Thailand’s tourism as well as on a global scale that already beat expectations.
As for the outlook in 2023, Mr. Paitoon stated that there has been pent-up demand for travelling or revenge travel since last year and the momentum is carrying to 2023. Meanwhile, there is also an increase in business travelling this year as countries are opening more flights following the reopening, which could lead to higher occupancy rates for MINT Hotel.
Earlier, MINT announced an issuance of new debentures in the amount of up to 9 billion baht with a greenshoe option of up to 2 billion baht to retail investors and/or institutional investors. The debenture offers 6.10% per year during the first 5 years.
Interest payment is payable semi-annually on 10 February and 10 August throughout the life of debentures.
The debenture is subscribable from 7-9 February 2023. The debenture has BBB+ by TRIS Rating Co., Ltd.
FSS International Investment Advisory (FSSIA) expected MINT’s earnings to more than double to THB5.5b in 2023 (78% of pre-Covid), with revenue up 18% to THB141b, exceeding pre-Covid by 19%. Key drivers would be 30% higher RevPAR y-y for Thai hotels and 15%-20% higher RevPAR y-y for European hotels, plus 7%-8% higher SSSG for its food business. FSSIA saw a potential upside from the hotel EBITDA margin which was forecast to be flat at 28%.
FSSIA gave a “BUY” recommendation on MINT with a target price at THB40 per share.
Meanwhile, SCB’s securities arm InnovestX expected 4Q22 will be 2022’s strongest with estimated core profit of Bt2.3bn from a strong low season in Europe, better hotel operations in Thailand and Maldives and improving food operations. The strong 4Q22 preview suggests upside for 2022 full-year forecast. INVX stated that it likes MINT’s earnings uptrend and attractive risk/reward as the share is trading 8% below pre-COVID-19 level, lagging other tourism plays (on average trading 33% above pre-COVID-19 level). INVX maintained its 3-month tactical call of Outperform on MINT with an end-2023 target price of THB38 per share.
