The share price of S Hotels and Resorts Public Company Limited (SET: SHR) plunged sharply by more than 7% in the morning session in concerns of the impact from the temporary closure of its hotel in Mauritius due to surges of Marburg Virus.
The government of Mauritius, an Indian Ocean island nation in Africa, ordered hotels and other businesses to close in fear of Marburg spreading in the country.
Krungsri Capital Securities (KCS) stated that the order by Mauritius government does not indicate the duration for the closure, while expecting it to be around 3-6 months.
Outrigger Mauritius hotel contributed around 4% to SHR’s revenue in 2022. KCS cited that the hotel shouldered around 10 million baht of fixed costs per month during the Covid lockdown in 2020-21 in Mauritius.
In assumption of three or six months closure, KCS expected 7% and 14% of impact, respectively, to SHR’s bottom line in 2023, which is forecast to be around 415 million baht. Still, this has limited impact to SHR’s target price of THB 5.00 per share, in KCS’ view.
KCS expected SHR to deliver 130 million baht of net profit in the first quarter of this year (vs -204 million baht in 1Q22 and +108 million baht in 4Q22). The spread of Covid in April that leads to hotel closure could hinder SHR’s performance in 2Q23 to see flat growth or slightly negative due to being in a low season for other businesses.
According to the World Health Organization, Marburg virus disease (MVD), formerly known as Marburg haemorrhagic fever, is a severe, often fatal illness in humans. The virus causes severe viral haemorrhagic fever in humans.
Marburg and Ebola viruses are both members of the Filoviridae family (filovirus). Though caused by different viruses, the two diseases are clinically similar. Both diseases are rare and have the capacity to cause outbreaks with high fatality rates.