On Thursday at 10:51 AM (Bangkok time), the share price of Central Plaza Hotel Public Company Limited (SET: CENTEL) jumped by 4.31% or THB 1.25 to THB 30.25, with a trading value of THB 37.42 million.
DAOL Securities (Thailand) has upgraded its recommendation on CENTEL from ‘Hold’ to ‘Buy,’ citing a stronger-than-anticipated turnaround in both hotel and restaurant operations. This follows upbeat updates from CENTEL, pointing to a quicker recovery in August, compared to earlier expectations that improvements would materialize by the fourth quarter.
CENTEL’s hotel business is showing notable momentum in the third quarter, with revenue per available room (RevPAR) in Thailand rising at a high single-digit rate year-on-year. The uplift is most pronounced in provincial areas, with Samui hitting its peak season and Pattaya posting robust growth following recent renovations. However, Bangkok hotels still lag, slipping by a mid-single-digit percentage compared to last year.
Internationally, CENTEL’s Japanese operations are seeing double-digit year-on-year gains for August and September, partially due to bookings shifted from July amid earthquake fears and boosted by the World Expo in Osaka—helping drive a projected double-digit rise for Japan overall in Q3, despite it being a low season. Dubai continues to experience low-single-digit year-on-year growth.
In the Maldives, while hotel revenues remain down by around 20% year-on-year, the worst appears to be over, with sequential improvement from the previous quarter’s 40% drop. Losses from new Maldives hotels are expected to narrow in the second half of 2025, following a first-half loss of THB 200 million. Management anticipates total annual losses from the Maldives portfolio to come in between THB 350 million and THB 380 million for the year.
CENTEL’s restaurant operations are stabilizing, with same-store sales growth (SSSG) now flat year-on-year after a 1% year-on-year drop in Q2. The recovery has been led by stronger performance from KFC since July. In addition, the company is pursuing one to two M&A deals in the F&B sector, which are expected to deliver immediate profit contributions, with details likely to be announced in the fourth quarter.
DAOL Securities maintains CENTEL’s normalized profit forecast of THB 1.67 billion for 2025, a 6% dip from last year on slower inbound tourism. The firm expects the second quarter to be the low point for earnings this year, with third-quarter profit likely to fall year-over-year but improve from the previous quarter amid a low base from the earthquake impact.
With booking trends and revenue growth improving, the analyst has rolled its target valuation forward to 2025, upgrading its fair value estimate to THB 36 per share (DCF-based, WACC 8.6%, terminal growth 1.5%) from the previous THB 29. This implies upside from the prospect of restaurant M&A deals.
CENTEL shares are trading at around 10x EV/EBITDA, a discount of 1.5 standard deviations below the eight-year average. However, risks remain, including the potential for higher-than-expected food costs, a slower domestic consumption recovery, and fewer Chinese tourist arrivals than anticipated.
