Kiatnakin Phatra Securities (KKPS) noted in its report that, in the fourth quarter of 2024, Asset World Corp Public Company Limited (SET: AWC) reported a substantial upswing in financial performance, delivering a pre-ex net profit of THB 689 million, marking an impressive 43% year-on-year increase and a staggering 139% surge from the previous quarter. This was significantly above the forecast by KKPS, which had estimated the figure at THB 605 million.
When including extraordinary gains from changes in the fair value of investment properties, AWC’s 4Q24 net profit escalated to THB 1.9 billion, representing a 36% rise compared to the same period last year and up 66% from the prior quarter.
For the entire year of 2024, pre-ex net profit reached THB 1.86 billion, up 65% from the previous year, and surpassed the analyst’s projection of THB 1.78 billion, while reported net profit, inclusive of extra gains, totaled THB 5.85 billion, reflecting a 16% year-on-year increase.
AWC’s operations maintained strong momentum, bolstered by a rise in Revenue per Available Room (RevPAR) and the scaling up of its property portfolio. This robust performance, alongside a solid stream of new hotel openings, is expected to keep growth rates above industry peers, justifying a premium valuation for its stock.
Hotel revenue exhibited a vigorous 21% year-on-year growth in 4Q24, surpassing KKPS’s projections of a 19% rise. Simultaneously, commercial property revenue climbed 5% year-on-year, also exceeding expectations of a 2% gain, driving overall revenue growth of 15% year-on-year.
The Meetings, Incentive, Conferences, and Exhibitions (MICE) hotel segment recorded the most significant revenue jump, with a 27% increase, while luxury resorts achieved a solid 17% growth during the quarter. For the full year, hotel revenue rose by 19% on a yearly basis, and commercial revenue edged up by 3% year-on-year. Hotels located in Bangkok experienced the highest annual growth at 24%, followed by luxury resorts, which grew by 17%.
Improved operating leverage in hotel operations contributed to better profit margins. The EBITDA margin for 4Q24 climbed to 38%, up from 32% in the third quarter of 2024 but slightly below the 39% seen in the same quarter the previous year.
The pre-ex net margin rose to 15.6%, a noticeable improvement from 7.6% in the previous quarter and 12.6% in 4Q23. The figure also exceeded KKPS’s preview estimate of 13.9%. For the entirety of 2024, the EBITDA margin surged to 37% with the pre-ex net margin rising to 11.7%, compared to 34% and 8% seen in 2023, respectively.
Looking ahead, the analyst projects AWC’s net profit to reach THB 2.42 billion in 2025, THB 3.05 billion in 2026, and THB 3.93 billion in 2027, reflecting continued robust growth expectations for the company.
KKPS gives a ‘BUY’ recommendation for AWC, setting a target price at THB 4.40 per share.
