FSSIA Says MINT’s Utilities Cost “Not as Bad as Market Fears” and Maintain Target at THB43

The share price of Minor International Public Company Limited (SET: MINT) plunged as much as 8.40% in the morning session on Thursday after the publication of Credit Suisse’s analysis that downgraded the company’s rating to ‘underperform’ and cut target price to THB25.50 from THB39.00 per share.

As of 11:30 BKK time on September 15, 2022, the share price of MINT is trading at THB27.75 per share, decreased THB2.00 or 6.72% after Credit Suisse stated that the economic slowdown and rising energy bills in Europe could impact MINT’s operation in overseas where the main revenue contribution for the company comes from NH Hotel Group SA, a Spanish multinational hotel company.


However, FSS International Investment Advisory (FSSIA) wrote that the impact of utilities cost for MINT may not be as bad as market fears. The firm elaborated that another concern for the sector is hotel operations in Europe from the rising natural gas prices, which affect the power prices of hotel operators. Utilities costs accounted for about 5-6% of total expenses for NH Hotels (MINT’s European hotel portfolio). Nevertheless, NH Hotels has locked in contracted power prices until 4Q22. Thus, FSSIA stated that it expected to see the impact in 2023.

The advisory firm noted that it ran a sensitivity analysis and concluded that if natural gas increases from USD195/MMBtu currently to USD250-300, there would be a significant impact to MINT. However, if ADR increases above pre-Covid by 20-30%, it would offset that impact.

Moreover, FSSIA also expected Thailand’s tourist arrivals to hit 34m in 2023, with a swing factor from Chinese tourists; RevPAR of Thai hotels should reach pre-Covid level by the end of this year.

FSSIA estimated MINT’s core profit forecast in 3Q22 to increase 159% YoY and 16% QoQ at THB 1,398 million and recommended ‘BUY’ MINT with a target price at THB43.00 per share.