On Wednesday at 11:15 AM (Bangkok time), the share price of Central Plaza Hotel Public Company Limited (SET: CENTEL) jumped by 10.62% or THB 3.00 to THB 31.25, with a trading value of THB 160.60 million.
Krungsri Securities (KSS) noted that CENTEL’s core profit for 4Q24 exceeded both the analyst’s and market forecasts by 81% and 62% respectively, due to higher-than-expected margins and robust profit sharing from investments.
Hotel revenue rose by 11% year-on-year and 25% from the previous quarter, reaching 3 billion baht, driven by a 4% increase in RevPAR to 4,306 baht per night due to higher room rates. Food revenue was 3.2 billion baht, up 2.5% year-on-year and 6% from the previous quarter, with stable same-store sales growth (SSSG).
Core EBITDA grew 24% year-on-year to 1.8 billion baht, with the EBITDA margin improving to 28.7%, led by improved profitability in hotels (37%, up from 34% in 4Q23) and food businesses (21.1%, up from 16.3% in 4Q23).
CENTEL recorded pre-opening expenses for new hotels in the Maldives of only 52 million baht in 4Q24 and 62 million baht for the year 2024, below KSS’s estimate of 100 million baht. Profit sharing from investments was higher than expected at 121 million baht compared to the usual range of 9-30 million baht per quarter, resulting in a full-year core profit of 1.7 billion baht for 2024 (+55% year-on-year).
Given the considerable outperformance in 2024, the analyst will review earnings estimates for the company after receiving more information following the analyst meeting on February 26, 2025. However, CENTEL is expected to face challenges surrounding year-on-year growth in 1Q25 due to the high profit base of 750 million baht in 1Q24, coupled with additional pre-opening expenses of approximately 40-50 million baht in 1Q25, and an anticipated loss of 4-5 million USD from operations in the Maldives in 2025 due to delayed hotel openings and the initial costs of the new hotels.
Nevertheless, the reopening of hotels in Pattaya and Phuket, along with strong performance from the hotel business in Japan, should help offset these impacts and could support profit growth in 2025.
According to KSS’s assessment, a 1% change in the EBITDA margin would affect the profit estimates by 10%. Currently, CENTEL is trading at 23x the 2025 P/E, compared to the historical average of 38x, while 2025 is expected to be the year when CENTEL’s performance returns to pre-COVID levels.
