Finansia Syrus Securities views positively the recent announcement that PTT Oil and Retail Business (SET: OR) and Central Plaza Hotel (SET: CENTEL) have formed a joint venture (JV) to penetrate Thailand’s budget hotel market. OR will hold a 49% stake in the JV, capping its initial investment at THB 356 million.
Construction of the first properties will begin in the second quarter of 2026, with operations expected to start in Q2 2027. The first phase will feature six hotels—five strategically positioned inside PTT stations, and one at an external location—which will enhance OR’s non-oil offerings and complete its service ecosystem alongside food & beverage and convenience stores.
For OR, this move is seen as a net positive:
- It expands the non-oil portfolio using OR’s high-potential locations.
- It leverages OR’s real estate and customer base.
- The partnership with CENTEL—a hotel management expert—adds confidence in successful execution.
- The investment size is manageable and will not impact OR’s capital structure, supported by its THB 40 billion in cash reserves.
The JV is not expected to significantly impact earnings in the first two years (2026–2027), but it is an important addition to OR’s long-term non-oil growth strategy. Currently, non-oil business represents only 4% of OR’s revenue but about one-third of EBITDA, and continues to show rapid growth and synergy with its core business.
Finansia Syrus expects OR’s 2026 earnings to grow 3–4% organically; further improvements are expected in 2027. The target price for OR is THB 18, with the recommendation to “Buy” maintained, supported by attractive valuation multiples (PE 14.6x, EV/EBITDA 6x).
For CENTEL, the JV aligns with its growth strategy by diversifying into the budget hotel segment. CENTEL will invest up to THB 360 million for a 51% stake, focusing on six initial hotels in Bangkok, Phuket, Chonburi, Hat Yai, Ayutthaya, and Kanchanaburi. CENTEL expects occupancy rates of 70–80% and room rates of THB 800 (upcountry) and THB 1,200–1,300 (Bangkok). CENTEL should benefit from synergy between the JV’s locations and OR’s ecosystem, broadening its hotel portfolio to reach new customer segments.
Analysts expect only a modest initial profit contribution (<1% upside to CENTEL’s 2027 earnings), with profitability ramping up as the business scales and achieves economies of scale.
Meanwhile, Bualuang Securities notes that CENTEL and OR the planned occupancy (70–80%) and competitive room rates (THB 800 for provinces, THB 1,200–1,300 for Bangkok) reflect an aim to compete directly with leading budget chains. Bualuang Securities emphasizes the strategic advantages for both partners:
- For CENTEL, the JV fills a portfolio gap in the budget segment and capitalizes on CENTEL’s brand and loyalty program.
- For OR, the move supports business diversification (targeting “all lifestyles”) and long-term growth, utilizing available land and retail traffic at PTT stations.
The analysts expect limited short-term earnings impact, with initial contributions of under 1% for CENTEL and below 0.5% for OR in 2027, as the JV requires time to ramp up and achieve scale. However, in the long term, this collaboration should drive growth through both portfolio expansion and increased market presence in the fast-growing budget segment.
