Credit Suisse Raises Target Price for MINT to THB40 on Solid Tourism Momentum

Given the solid momentum in tourism in Thailand and around the world so far this year, Credit Suisse raised its target price for Minor International Pcl. (SET: MINT) to THB40.0 and lifted its earnings forecast for this year to reflect the Bangkok-based leading hospitality and leisure firm’s promising outlook.

In 1Q23, MINT reported a significant improvement in its core operations, with a net loss of THB0.6 billion, compared to a net loss of THB13.6 billion in the first quarter last year. The loss deteriorated from a profit QoQ largely due to a low season of European hotel operations. 

Revenue from hotel and restaurant operations was contributed to the top-line recovery, generating THB131.3 billion in income, up 59% YoY due to an improvement across businesses but down 10% QoQ due to seasonality; Hotel revenue was THB23.4 billion (+80% YoY and -14% QoQ), Restaurant revenue was THB7.3 billion (-19% YoY and +5% QoQ), and Retail trading revenue was THB0.6 billion (+59% YoY and -10% QoQ). 

Thailand hotel revenue topped the improvement with +227% YoY and +20% QoQ, followed by Europe, Australia and New Zealand, and Maldives. 1023 RevPar of MINT hotel portfolio was 12% above pre-Covid 19 level and +61% YoY due to global travel demand stabilization. 

With its strong 1Q23 performance, Credit Suisse have an Outperform rating on MINT and lifted its target price to THB40.0 from THB38.0 to account for the less-than-anticipated impact of utility costs on its European hotel operations, its resilient room rates to date, and the positive growth in Chinese outbound tourism. Credit Suisse also upgraded MINT’s 2023-24 earnings by 17-20%.

The Swiss bank raised its 2023/24 tourist arrival assumption to 74%/105% of pre-Covid, from 70%/104% with the normalization of Chinese tourists as one of key drivers. Credit Suisse expected the number of Chinese tourists to accelerate from 2H23 when constraints should ease further.