Following a meeting on Thursday, analysts reaffirmed a “BUY” recommendation for Minor International Pcl. (SET: MINT), indicating optimism about the company’s performance in 3Q23 and setting a target price of THB40.0-THB43.0 per share.
KGI Securities forecasts that MINT will have a strong 3Q23, despite an off-peak season in Europe. The expected primary drivers are the recovery of Chinese economic growth, the return of international tourists to Thailand, and the improvement of the business section of European hotels (e.g., MICE). However, there could be headwinds from a disappointing performance in Maldives, decreased domestic spending, and increasing prices. Among hotel stocks, MINT is one of KGI’s top recommendations, with an Outperform rating and a THB43.00 target price (based on 13.8x 2023F EV/EBITDA, or +0.5SD to its long-term mean).
Daol Securities reiterated its BUY recommendation on MINT and set a target price of THB40.00 (assuming a WACC of 7% and a terminal growth rate of 2.5%) based on DCF.
After an analyst meeting, the brokerage has a favorable outlook on MINT’s guidance because the Europe-based chain hotels posted RevPAR up 7% YoY in July, which was 20% over the pre-COVID-19 level due to the strong tourist season. Pent-up demand for leisure travel following the pandemic, as well as higher tariff rates when the company renovated, also contributed to the rise in ADR. In addition, the company continues to pursue mergers and acquisitions while hedging energy costs at 60% of total usage.
Strong success in the hotel business in Thailand and Europe has allowed Daol to retain its 2023 net profit prediction of THB5.9 billion, an increase of 37% year over year. Due to the peak season in Europe and the low season in Thailand and the Maldives, Daol anticipates a year-over-year increase in net profit for 3Q23, but a quarterly decrease.
