CLSA Securities (CLSA) has issued a comprehensive report on Minor International (SET: MINT), a prominent Thai-based hotel and restaurant operator known for its extensive portfolio of over 520 hotels across Europe and the Asia Pacific region.
The report highlights MINT’s attractive valuation, emphasizing its 15% year-on-year core EPS growth forecast for 2024 and strategic priorities for deleveraging and value extraction.
The analyst expects MINT to achieve significant EPS growth driven by its hotel segment, with key factors such as major events like UEFA Euro 2024, the resurgence of business travel, and brand enhancements contributing to RevPar growth in Europe. Additionally, ongoing tourism recovery in Thailand is projected to fuel further growth.
MINT’s strong brand portfolio allows for global expansion through higher-margin asset-light models, with plans to increase the share of managed hotels to 38% by 2026. The integration of the NH Hotel Group offers opportunities for optimizing brand mix to enhance average daily rates (ADR).
CLSA underscores MINT’s commitment to reducing its net interest bearing debt to equity (IBD/E) ratio from 1.0x in 2023 to 0.8x by the end of 2024. Improved cash flow generation and strategic debt reduction initiatives are expected to support the company’s deleveraging goals and enhance investor confidence.
The analyst gives a ‘BUY’ recommendation for MINT, with a target price of THB 40.50, representing a 33% TSR potential. The valuation is based on a target EV/Ebitda multiple of 9x for the hotel segment and 8x for the food segment, indicating attractive investment opportunities relative to Europe-based peers.
CLSA projected MINT’s net profit in 2024-26 at THB 8,374 million, THB 9,613 million, and THB 11,067 million, respectively.
Moreover, MINT’s ESG score of 73.2 surpasses both country and sector averages, reflecting strong performance across all three ESG pillars. The company’s focus on ESG practices aligns with its long-term sustainability goals and reinforces its positive market positioning.
