Daol Securities maintains a neutral outlook on The Erawan Group Public Company Limited (SET: ERW), noting that recent performance aligned with expectations:
- Management believes Chinese tourist arrivals have likely hit their trough, and the company is working to attract more visitors from the Middle East and India.
- Revenue per available room (RevPAR) is expected to decline by 9-10% in 2Q25, leading to lower overall revenue.
- The “Khon La Khrueng” (Half-Half) government stimulus scheme is likely to launch in July, but the revenue boost will be marginal.
- Renovations of the Grand Hyatt Erawan are rescheduled to start in 3Q25, later than previously planned.
- ERW plans to open a “Combo Hotel” near BTS Phrom Phong in 2026.
The firm maintains its 2025 normalized profit forecast at THB 772 million, down 17% year-on-year—the sharpest contraction in its sector.
Maybank Securities revised its long-term ERW growth projection down to 2% (from 3%), and cut its 2025–2026 earnings forecasts by 8-10%. The new forecasts factor in approximately THB 2 billion in capital expenditure (CAPEX) for a new mid-scale hotel in central Bangkok.
ERW shares have declined since the beginning of the year, reflecting weak earnings anticipated in 2-3Q25 due to softer demand, especially from Chinese tourists. Maybank also expects 2Q25 to mark the bottom, with recovery set for the second half of the year.
Globlex Securities maintains its 2025 operating revenue forecast for ERW at THB 8.224 billion, a 5% year-on-year increase (the company recently revised its growth target down from 10% to 6-8%).
The securities firm expects Thailand to welcome approximately 36-37 million international tourists in 2025, with revenue growth fueled by the mid-scale, budget, and Hop Inn hotel segments. Additional tailwinds include increased arrivals from India and the Middle East.
The company assumes an EBITDA margin of 33%, close to last year’s level, due to continued cost efficiency. Net profit is projected at THB 881 million, a 3% decline.
TISCO Securities notes that the off-peak travel season, combined with a slowdown in international visitor arrivals, means ERW is likely to see moderated growth, particularly in its luxury hotel segment—which has been significantly affected by the decline in Chinese tourists.
However, continued growth momentum for Hop Inn properties in both Thailand and the Philippines, coupled with strong performance from Hop Inn Thailand and Japan, should support robust profits in 2Q25.
Maybank, Globex, and TISCO saw positive sentiment toward ERW, particularly in the middle-cost, or Hop Inn hotel segments; these three firms recommended “Buy” on ERW stock at target prices of THB 3.00-4.30.
Meanwhile, Daol maintained its neutral perspective on ERW as the company’s recent performance is aligned with its forecast, the firm thus maintains its “Hold” position on ERW stock at a target price of THB 2.50.
