Phillip Securities maintains a positive outlook for The Erawan Group Public Company Limited (SET: ERW), forecasting a core profit of THB 382 million for the first quarter of 2026—a growth of 2.4% quarter-on-quarter (QoQ) and 10.7% year-on-year (YoY). The profit growth is supported by a continued recovery in operating performance, primarily driven by inbound international tourists, notably Chinese visitors traveling to Thailand.
For January and February 2026, the occupancy rate remained elevated at approximately 90% before moderating in March. Despite facing headwinds from a slowdown in European and Middle Eastern tourist arrivals due to travel restrictions, overall occupancy remained robust above 80%, as longer stays by returning guests helped offset the impact.
Total revenue for 1Q26 is projected at THB 2,280 million, representing growth of 1.2% QoQ and 7.2% YoY. This increase is attributable to higher Total Revenue Per Available Room (RevPAR) across the luxury to economy segments, reaching THB 3,097 per night (+5.9% QoQ, +4.1% YoY). The Average Room Rate (ARR) stands at THB 3,565 per night (+1.9% QoQ, -0.2% YoY), while the occupancy rate is estimated at 87%, up from 83% in the same period last year.
This performance reflects heightened occupancy demand during the peak tourism season, though the company’s ability to raise room rates—particularly in the midscale and economy segments—has yet to fully recover. Gross margin improved to 49.6%, compared to 48.8% in 1Q25, supported by more effective cost controls.
A one-time charge of THB 10 million related to the early repayment of loans is expected to temporarily weigh on short-term profit. However, Phillip believes this does not affect ERW’s underlying fundamentals. The early debt repayment is expected to result in reduced financial costs, which should have a positive effect on long-term interest expense trends.
Phillip Securities maintains its ‘Buy’ recommendation with a base price of THB 3.30 per share. ERW’s recent share price correction is seen as having already priced in many of the prevailing concerns. Furthermore, the stock is now trading at a projected 2026 price-to-earnings (P/E) ratio of 12x, below its two-year historical average of 16x, making the current valuation attractive.
