Company Overview
Minor International Public Company Limited is a Thailand-based company engaged in the investment activities, hotels, restaurant operations, and distribution and manufacturing. The Company operates through four segments: Hotel, Mixed use, Restaurant and Retail. The Company operates hotels, resorts and serviced suites with a portfolio of over 520 hotels under the Anantara, AVANI, Oaks, Tivoli, Elewana, NH Collection, NH, nhow, Marriott, Four Seasons, St. Regis, Radisson Blu and Minor International brands. Its hotel and spa portfolio spans across 56 countries in Asia Pacific, the Middle East, Africa, the Indian Ocean, Europe and the Americas. The Company operates mixed-use business, including shopping plazas and entertainment, residential properties, and a points-based vacation club. It offers fashion and lifestyle products under various brands, including Anello, BergHOFF, Bodum, Bossini, Charles & Keith, Esprit, Joseph Joseph, Radley, Zwilling J.A. Henckels and Minor Smart Kids.
Investment Overview
A global hospitality and leisure company. MINT is one of the largest hospitality and leisure companies in the Asia Pacific region. The company operates 550 hotels & resorts, 2,642 restaurants, and 287 retail trading points of sale in Thailand and 62 other countries across Asia Pacific, the Middle East, Africa, the Indian Ocean, Europe, and the Americas. In 2023, Minor Hotels made up 78% of total revenue, followed by Minor Food (20%), and Minor Lifestyle (2%). Revenue from Europe accounted for 57% of total revenue, followed by Thailand (21%), Australia & New Zealand (9%), and others (13%).
A key beneficiary of strong tourism in Europe and Thailand. MINT’s revenue and core profit hit all-time highs in 2023 and are expected to reach new highs from 2024F, with hotel operations still robust and expansion set to continue. In 2024, Europe’s hotel operations will benefit from strong leisure demand, multiple high-profile entertainment events and concerts, world sporting events, and numerous conferences and trade fairs. In Thailand, hotel operations will also benefit from the government’s stimulus to boost tourist arrivals to Thailand. Over the medium to long term, MINT should benefit from growing tourist arrivals as well as business activity in Europe and Thailand.
Key factors to watch out for are: (i) Tourism outlook in Europe and Thailand and (ii) interest rate trend. The strong tourism in Europe and Thailand should be positive for MINT, as these markets accounted for 57% and 21% of MINT’s revenue in 1H24. The falling interest rate trend should be positive for MINT, as 44% of its debt is based on floating rates.
Reiterate BUY with a DCF-based TP of THB38.50. We maintain our core earnings forecast but reflect the extra loss seen in 9M24. Hence, our net profit in FY24F was down 18%. Our DCF-based TP remains unchanged at Bt38.50. The stock is now trading at an attractive EV/EBITDA of 5.5x and P/BV of 2.0x (implying -1SD of its five-year historical average). With the strong core earnings and a 44% upside from the current TP, we maintain our BUY call.
Risks
(i) a slowdown in Europe and Thailand’s tourism industry and (ii) weaker-than-expected consumer confidence.
Topic
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