Krungsri Securities Picks MINT and AOT after Strong Performance in Tourism Industry

The tourism sector in Thailand is projected to be growing as the number of tourists surged and conformed with the expectation of Krungsri Securities (KSS).

KSS stated in its report that tourist arrivals reached 9.3 million in the first quarter of 2024, with significant growth compared to the previous year. The top five nationalities contributing to these arrivals were from China, Malaysia, Russia, South Korea, and India. The report highlights a positive outlook for the long-haul travel market, particularly from Russia, the UK, and the US. 1Q24 tourist arrivals accounted for 26% of the full-year forecast of 35.8 million.

The report anticipated a smaller seasonal impact in the second quarter of 2024 due to upcoming festivities like Eid and Songkran. The period is typically slower before picking up an increase in tourist arrivals in the third and fourth quarters.

The analyst expected Thai hotels, including AWC, ERW, and CENTEL, to register earnings growth quarter over quarter in 1Q24F, driven by rising foreign tourist arrivals. However, year-over-year performance may vary due to increasing costs.

As for MINT (Minor International), 1Q24F earnings are projected to grow year over year but drop quarter over quarter due to seasonal factors, while in 2Q24F, earnings are expected to improve both year over year and quarter over quarter, mainly driven by the high season in Europe, which accounts for a significant portion of hotel revenue.

The report also predicted airport operations in Thailand to continue improving in the second and third quarters, following a recovery in inbound and outbound travel.

The analyst gave “BUY” recommendations for MINT and AOT with target prices of THB 42 and THB 75, respectively.