MINT, ERW and AOT Are Top Picks as Thailand Expects Strong Boost from Visa Exemption

Thailand is expecting a boost from Chinese tourists with a temporary visa exemption that could give the kingdom a strong boost in tourist arrivals in the final quarter of this year.

CGS-CIMB Securities stated that tourist arrivals in Thailand are on track to meet its projection of 28 million by the end of this year. The number is expected to reach 35-40 million in 2024, but still lower than the pre-Covid figure of 41.7 million. Though a strong recovery in 4Q23 and 2024 is expected, it is still a challenge for Thailand given higher competition after the Chinese government lifted restrictions on outbound group tours to Japan, South Korea and others, while the Indian government plans to increase outbound remittance tax from 5% to 20% for overseas tours that includes air tickets and hotels.

Citing historical data in 2014 and 2018 of waiving visa fees, CGS-CIMB analyst stated that easing of visa requirements and fees have proven successful in the past as tourist arrivals rose from 19-56% during the implementation in 2014 and 2018 when compared to the preceding three-month average.

CGS-CIMB added that The Erawan Group Public Company Limited (SET: ERW), Airports of Thailand Public Company Limited (SET: AOT), Siam Wellness Group Public Company Limited (SET: SPA) and Central Plaza Hotel Public Company Limited (SET: CENTEL) would benefit most from tourism boost as non-domestic travellers in Thailand to account for 80% of ERW’s revenue, followed by 65% of AOT’s, 60% of SPA’s, 40% of CENTEL’s, 17% of SHR’s and 9% of MINT’s in FY24F.

The brokerage firm noted that it is expecting to re-rate Thai hotel operators on catalysts of elevated occupancy, robust room rates and limited industry supply additions in 2H23F and 2024F.


CGS-CIMB reiterated Overweight rating on ERW and Minor International Public Company Limited (SET: MINT) as sector’s top picks and also liked AOT as a defensive option due to its lower operating leverage.

MINT still has 24% upside to its target price of THB 41.00 per share, given by CGS-CIMB that expects MINT’s operations in Europe to perform well in 3Q23 and Asia hotels in 4Q23 due to a peak season for both regions. Moreover, the food business is expected to see a decent margin in 2H23F given lower food costs.

ERW and AOT have smaller upsides to target price of THB 6.00 and THB 78.00 per share, respectively.

CGS-CIMB expects positive RevPAR momentum in 2H23 for ERW, driven by robust room rates and strong occupancy led by continued recovery in tourist arrivals. Still, the brokerage firm expects net profit in the second half to be dented by one-off expenses related to its expansion in Japan.

Meanwhile, Thailand’s major airport operator AOT should have a strong tourist arrivals during high season in Thailand (1Q and 4Q). A strong recovery in concession revenue and potential passenger service charge hikes are re-rating catalysts.