At the end of the morning session on Friday, the share price of Asia Aviation Public Company Limited (SET: AAV) declined by 1.63% or THB 0.04 to THB 2.42, with a trading value of THB 48.56 million.
Bangkok Airways Public Company Limited (SET: BA) slumped by 1.89% or THB 0.40 to THB 20.80, with a trading value of THB 78.26 million.
Minor International Public Company Limited (SET: MINT) dropped by 4.07% or THB 1.00 to THB 23.60, with a trading value of THB 606.73 million.
S Hotels and Resorts Public Company Limited (SET: SHR) decreased by 1.89% or THB 0.04 to THB 2.08, with a trading value of THB 19.14 million.
The decline in Thai tourism stocks could be linked to recent developments involving a Chinese actor, Wang Xing, who was reported missing near the Thai-Myanmar border last week. Subsequent investigations revealed that the actor was located in Myanmar and is suspected to have fallen victim to human trafficking, as indicated by Thai authorities.
In response, Thai law enforcement agencies are ramping up their measures to dismantle human trafficking networks.
DAOL Securities (Thailand) noted concerns raised by the Association of Thai Travel Agents (ATTA) regarding a projected 10-20% decrease in Chinese tourist arrivals during the upcoming Chinese New Year Festival, with anticipated decline in safety confidence expected to impact their travel decisions.
The analyst expressed negative sentiment toward the estimation for the overall number of Chinese tourists this year. Historical data indicated an average of 181,080 Chinese tourists per week from January 29, 2024, to February 18, 2024, but Thailand could face a potential decrease of 10-20% in 2025 due to these unfortunate events. Weekly figures could drop to between 145,000 and 163,000 tourists.
This trend poses a downside risk for the number of tourist arrivals during the Chinese New Year 2025 on January 29, with estimated numbers of Chinese tourists in 2025 reaching 8 million, up by 19% year-on-year. The overall tourist arrivals expected in 2025 are forecasted to be 39 million, reflecting a 10% annual increase.
Conversely, among the stocks expected to be affected by the reduction in Chinese tourist arrivals, the impact would vary in terms of revenue dependency on Chinese tourists, with ERW, CENTEL, MINT, and SHR being the most to least affected. Nonetheless, the analyst anticipates resilient tourism from India and Europe, which is foreseen to mitigate the decline in Chinese tourist numbers.
As a result, DAOL Securities (Thailand) maintains an ‘Overweight’ rating for the tourism sector and chooses AAV, CENTEL, and MINT, as its top-pick stocks, recommending ‘BUY’ with target prices at THB 3.60, THB 44.00, and THB 34.00, respectively.
