Krungsri Securities (KSS) noted that Central Plaza Hotel Public Company Limited (SET: CENTEL)’s management has adjusted its 2025 revenue target to THB 26.5-27.5 billion, an increase of 9-13% year-on-year, slightly above the analyst’s forecast of THB 26 billion.
This adjustment reflects specific growth expectations within the company’s hotel and food segments. The hotel segment anticipates a 17-20% year-on-year revenue rise to THB 13 billion compared to KSS’ estimate of THB 12.6 billion, benefiting from the reopening of properties in Pattaya and Phuket and strong performance in Japan, which offsets renovations in Hua Hin and Krabi.
The company projects Revenue Per Available Room (RevPAR) between THB 4,300 and THB 4,600, surpassing the analyst’s estimate of THB 4,288. Meanwhile, the food segment aims for 4-6% revenue growth year-on-year, focusing on profitability through the expansion of higher-margin joint ventures like Shinkanzen and Salad Factory, despite a recent 2% drop in same-store sales growth due to softer performance from KFC and Mister Donuts.
Looking forward, CENTEL expects its second-quarter 2025 core profit to grow year-on-year although it may soften quarter-on-quarter due to seasonal factors. The surge year-on-year is anticipated to be bolstered by April’s room revenue, increasing 9% year-on-year, supported by a 2% rise in Thailand alone and the reopening of renovated properties.
The resumption of Bangkok’s MICE business and robust bookings in Japan, driven by increased room rates ahead of the Osaka World Expo 2025, are anticipated to fuel further improvements in the remaining months of the quarter.
Meanwhile, despite these positive trends, a sluggish Maldives market continues to pose challenges to the overall hotel portfolio growth. First-quarter core profit accounted for 40% of the full-year 2025 forecast of THB 1.8 billion, maintaining a projected 5% increase year-on-year.
KSS pointed out that CENTEL’s diversified revenue streams provide resilience amidst anticipated challenges in the tourism sector. The food segment, responsible for about 51% of revenue, reduces the company’s dependency on tourism, while geographic diversification in the hotel business, with significant revenue drawn from Thailand and Japan, offsets regional weaknesses.
The 31% decline in CENTEL’s price since the beginning of the year reflects concerns about the tourism outlook, indicating a 5% cut in room rates for 2025. Meanwhile, the company has increased rates by 2% year-on-year and RevPAR by 5% in 1Q25, with expectations for a single-digit increase in 2Q25.
The stock is currently trading at a 2025 price-to-earnings ratio of 17x, which is below the historical average of 35x and close to -2 standard deviations, indicating that most downside risks are already priced in. Therefore, the analyst maintains a ‘BUY’ recommendation for CENTEL with a target price set at THB 35.00 per share.
