Minor International - Global Alliance Partners
Minor International
Sell (17E TP Bt39.25)
Company Update
Close Bt38.25
Food & Beverage October 31, 2016
Earnings upgrade/Earnings downgrade/Overview unchanged
Tivoli has saved the day Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
1.309
1.495
KT ZMICO vs. consensus Share data
27.6%
‐11%
Reuters / Bloomberg
MINT.BK/MINT TB
Paid-up Shares (m)
4,410.37
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
169.00/4,816.00
Foreign limit / actual (%)
49.00/42.14
52 week High / Low (Bt)
43.25/30.00
Avg. daily T/O (shares 000) NVDR (%)
9,364.00 6.76
Estimated free float (%)
50.79
Beta
0.97
URL
www.minorinternational.com
CGR Level 4 (Certified)
Anti‐corruption
Anapat Wanuschaiyapruk Analyst, no 57076 [email protected] 66 (0) 2-624‐6236
Core profit to grow 26%YoY We forecast MINT’s core profit to grow 26%YoY to Bt1,041mn, driven by high seasonality of Tivoli (hotels in Portugal) and inorganic growth from the food business. The company has seen some impact from the mourning period on revenue from function rooms and restaurants in Thailand. However, the impact is deemed miniscule compared to the net profit base and this will not significantly affect our 17E TP. The share is currently fully valued, so our Sell rating stands. Tivoli has saved the day While Q3 was the low season in Thailand and the operations in the Maldives and Brazil are still facing headwinds, Tivoli was in its peak season, driving the performance of overseas hotels. The occupancy rate of its overseas portfolio increased by 13%YoY, boosting RevPAR by 11%YoY. Tivoli’s room rates have increased by double‐digit percentages after the renovation. The occupancy rate of owned hotels (include Tivoli) has increased by 9%YoY while RevPAR increased 8%YoY. Oaks’ RevPAR increased 6%YoY due to higher room rates and THB depreciation. Hotel revenue is expected to jump 57% from the consolidation of Tivoli while the margin will be rather flat, dragged down by the poor performance in the Maldives and Brazil. Double‐digit growth for food business in Thailand and China The food business in Thailand and China has shown an excellent performance with SSSG of 5.8% and 4.4% while TSSG was 17.5% and 21.6% from continuous expansion of outlets. Australia’s operation saw SSSG at 1%, turning around from ‐2% last quarter. The Singapore hub still faced hard times from the unfavorable economic situation and its SSSG continued to slump by 7%. We forecast the top line of the food business to grow by 27%YoY to Bt5,474mn as a result of 15% TSSG and consolidation of MinorDKL (operation in Australia). The margin is expected to continue improving as in the last few quarters. The mourning period impacting both hotels and food MINT has seen cancellations of function rooms and hotel rooms worth less than Bt100mn so far and around 80% was from function rooms. However, we think that there should be more concern over consumption sentiment as restaurants’ SSSG in the past week seems to signal a slowdown. We think negative SSSG in Thailand is possible in the worst case. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Norm net profit (Btmn) EPS (Bt) EPS growth (%) Norm EPS (Bt) Norm EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2013 34,669 3,795 1.04 11.4% 0.97 8.4% 0.35 6.27 2013
2014 37,228 4,250 1.00 ‐4.3% 0.97 ‐0.1% 0.25 6.37 2014
2015 42,432 4,705 1.60 59.9% 1.07 10.7% 0.35 7.45 2015
2016E 52,145 5,433 1.67 4.6% 1.23 15.5% 0.45 8.77 2016E
2017E 54,840 5,854 1.33 ‐20.5% 1.33 7.8% 0.53 9.65 2017E
2018E 60,347 6,564 1.49 12.1% 1.49 12.1% 0.60 10.61 2018E
39.56 28.44 6.10 0.9% 17.2% 74%
39.62 26.98 6.00 0.7% 15.8% 96%
35.79 25.60 5.13 0.9% 23.1% 115%
30.72 19.59 4.34 1.2% 21.1% 96%
28.75 18.33 3.94 1.4% 14.4% 74%
25.64 17.20 3.59 1.6% 14.6% 55%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: MINT’s 3Q16 earnings preview Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Extra items Gn (Ls) from affiliates Net profit (loss) Core profit (loss) Reported EPS (Bt) Gross margin (%) EBITDA margin (%) Net margin (%)
3Q15 10,071 5,663 944 (313) 780 (56) 100 173 923 824 0.21 56.2 9.4 8.2
2Q16 12,029 6,871 1,418 (386) 599 (102) 136 30 732 596 0.17 57.1 11.8 5.0
3Q16E 13,420 7,611 1,998 (390) 520 (177) 0 100 1,041 1,041 0.24 56.7 14.9 7.8
%YoY 33.2 34.4 111.7 24.6 (33.3) 216.9 (100.0) (42.2) 12.8 26.4 12.8
%QoQ 11.6 10.8 40.9 1.1 (13.2) 73.7 (100.0) 228.2 42.3 74.8 42.3
Sources: MINT, KT Zmico Research
9M16E 38,602 22,222 6,022 (1,182) 1,697 (577) 2,068 314 5,348 3,280 1.21 57.6 15.6 8.5
%YoY 27.4 26.6 47.0 23.5 1.5 186.8 274.4 (56.7) 47.7 6.9 47.7
%YoY 25.1 26.0 33.9 12.8 21.5 33.4 (11.4) (23.3) 7.2 16.5 7.2
2016E 53,103 31,000 8,372 (1,467) 2,586 (548) 2,068 962 7,549 5,481 1.71 58.4 15.8 10.3
YTD 72.7 71.7 71.9 80.6 65.6 105.3 100.0 32.6 70.8 59.8 70.8
Figure 2: Hotel operation results
Bangkok
Occupancy rate ARR (Bt/room/night) RevPAR (Bt/room/night)
3Q15 65% 4,762 3,115
3Q16 76% 4,585 3,489
Upcountry %ch +11% ‐4% +12%
3Q15 70% 5,863 4,076
Overseas
3Q16 71% 6,075 4,321
%ch +1% +4% +6%
3Q15 62% 6,502 4,001
Oaks
3Q16 72% 5,909 4,441
%ch +10% ‐9% +11%
3Q15 79% 4,214 3,331
3Q16 79% 4,509 3,562
%ch +1% +7% +6%
Sources: MINT, KT Zmico Research
Figure 3: Restaurant operation results 10.0%
10.0%
SSSG by country
TH CH AU
5.0% 0.0%
Total SSSG
5.0%
1.5% 1.2% 0.4% 0.6% ‐1.8%
0.0%
‐1.6%
0.9% ‐0.2% 0.3%
2.3% 3.0%
‐5.0%
‐5.0%
SG
‐10.0%
‐10.0%
‐15.0%
‐15.0% ‐20.0%
‐20.0%
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16
Source: MINT, KT Zmico Research
Figure 4: MINT’s PER band
Figure 5: MINT’s PBV band
(X)
(X) 7.0
40 +2 S.D.
6.0
+1 S.D.
4.0
Avg.
20
3.0
-1 S.D.
Source: Bloomberg, KT Zmico Research
Source: Bloomberg, KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Oct-16
Jan-16
Apr-15
Jul-14
Oct-13
Jan-13
Apr-12
Jul-11
Oct-10
Jan-10
-2 S.D.
Jan-07
Oct-16
Jan-16
Apr-15
Jul-14
Oct-13
Jan-13
Apr-12
Jul-11
Oct-10
0.0
Jan-10
0
Apr-09
1.0
Jul-08
5
Oct-07
-1 S.D.
2.0
-2 S.D.
Jan-07
Avg.
Apr-09
10
+1 S.D.
5.0
25
15
+2 S.D.
Jul-08
30
Oct-07
35
FINANCIAL TABLE PROFIT & LOSS (Btmn) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Gain (loss) from affiliates Extra items Non‐controlling interest Net profit Reported EPS Fully diluted EPS Core net profit Core EPS Dividend (Bt) BALANCE SHEET (Btmn) Cash and equivalents Accounts receivable Inventories Investment PP&E‐net Other assets Total assets ST debt & current portion Long‐term debt Total liabilities Paid‐up shares Shareholder equity Total liab. & shareholder equity CASH FLOW (Btmn) Net income Non‐cash adjustment Depreciation & amortization Change in working capital Cash flow from operations Capex (Invest)/Divest Others Cash flow from investing Debt financing (repayment) Equity financing Dividend payment Others Cash flow from financing Net change in cash Free cash flow FCF per share (Bt) PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2013 34,669 (14,549) 20,120 (16,504) 6,115 (2,498) 3,616 (1,027) 1,431 4,020 (675) 530 306 (80) 4,101 1.04 1.04 3,795 0.97 0.35
2014 37,228 (15,321) 21,907 (18,422) 6,372 (2,887) 3,485 (1,145) 1,584 3,924 (397) 823 152 (100) 4,402 1.00 1.00 4,250 0.97 0.25
2015 42,432 (17,829) 24,603 (21,473) 6,254 (3,124) 3,129 (1,301) 2,128 3,957 (411) 1,254 2,335 (94) 7,040 1.60 1.60 4,705 1.07 0.35
2016E 52,145 (21,616) 30,529 (26,386) 8,357 (4,214) 4,143 (1,467) 2,548 5,224 (542) 962 1,932 (210) 7,365 1.67 1.67 5,433 1.23 0.45
2013 3,370 3,383 1,675 5,959 37,452 8,284 60,124 4,782 18,602 33,249 4,018 26,875 60,124
2014 5,372 3,326 1,942 8,123 39,814 15,703 74,279 6,620 27,461 44,255 4,202 30,024 74,279
2015 4,003 4,960 2,414 10,162 53,002 21,196 95,737 4,101 41,373 59,822 4,642 35,915 95,737
2016E 3,809 6,096 2,966 10,895 56,221 22,418 102,405 9,377 34,850 60,456 4,642 41,950 102,405
2013 4,182 (688) 2,498 (270) 5,722 (7,416) (80) (7,496) (1,000) 3,602 (1,185) 28 1,445 (329) (1,774) (0.44)
2014 4,502 (1,308) 2,887 (693) 5,388 (13,798) 386 (13,412) 11,400 1 (1,401) 26 10,027 2,003 (8,024) (2.01)
2015 7,134 (3,353) 3,124 (3,659) 3,247 (12,821) (1,105) (13,926) 10,147 22 (1,001) 125 9,294 (1,386) (10,679) (2.43)
2016E 7,575 (2,838) 4,214 (1,030) 7,921 (6,000) 673 (5,327) (1,246) 0 (1,541) 0 (2,787) (193) 2,593 0.59
2013 10.7% 12.3% 8.4% 58.0% 17.6% 10.4% 11.8% 10.9% 15.6%
2014 7.4% 4.2% ‐0.1% 58.8% 17.1% 9.4% 11.8% 11.4% 10.1%
2015 14.0% ‐1.9% 10.7% 58.0% 14.7% 7.4% 16.6% 11.1% 10.4%
2016E 22.9% 33.6% 15.5% 58.5% 16.0% 7.9% 14.1% 10.4% 10.4%
2017E 54,840 (22,520) 32,320 (27,777) 9,045 (4,502) 4,543 (1,489) 2,664 5,718 (594) 960 0 (230) 5,854 1.33 1.33 5,854 1.33 0.53
2017E 4,262 6,411 3,119 12,377 52,718 22,815 101,702 7,787 31,072 55,649 4,642 46,053 101,702
2018E 60,347 (24,868) 35,479 (30,395) 9,587 (4,502) 5,085 (1,399) 2,894 6,580 (683) 932 0 (265) 6,564 1.49 1.49 6,564 1.49 0.60 2018E 6,357 7,054 3,433 13,831 49,236 23,223 103,135 12,013 22,567 52,595 4,642 50,540 103,135
2017E 6,084 (960) 4,502 (302) 9,324 (2,000) 478 (1,522) (5,369) 0 (1,981) 0 (7,350) 452 7,803 1.77
2018E 6,829 (932) 4,502 (141) 10,258 (2,020) 477 (1,543) (4,278) 0 (2,342) 0 (6,620) 2,095 8,715 1.98
2017E 5.2% 8.2% 7.8% 58.9% 16.5% 8.3% 10.7% 10.7% 10.4%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
2018E 10.0% 6.0% 12.1% 58.8% 15.9% 8.4% 10.9% 10.9% 10.4%
Note: KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, PACE, TPOLY, M‐CHAI, TFD, SUTHA. KT ZMICO is a co‐underwriter of ALLA.
Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD) Excellent (scores: 90 ‐ 100) Very Good (scores: 80 – 89) Good (scores: 70 – 79)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Anti‐corruption Progress Indicator Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC)
Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market UNDERWEIGHT: The industry, as defined by the analyst's returns over a six‐month period due to specific coverage universe, is expected to underperform the relevant catalysts primary market index by 10% over the next 12 months. SELL: Expecting negative total returns of 10% or more over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
th
th
th
th
KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
th
Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
Sell (17E TP Bt39.25)
Company Update
Close Bt38.25
Food & Beverage October 31, 2016
Earnings upgrade/Earnings downgrade/Overview unchanged
Tivoli has saved the day Price Performance (%)
Source: SET Smart
FY16
FY17
Consensus EPS (Bt)
1.309
1.495
KT ZMICO vs. consensus Share data
27.6%
‐11%
Reuters / Bloomberg
MINT.BK/MINT TB
Paid-up Shares (m)
4,410.37
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
169.00/4,816.00
Foreign limit / actual (%)
49.00/42.14
52 week High / Low (Bt)
43.25/30.00
Avg. daily T/O (shares 000) NVDR (%)
9,364.00 6.76
Estimated free float (%)
50.79
Beta
0.97
URL
www.minorinternational.com
CGR Level 4 (Certified)
Anti‐corruption
Anapat Wanuschaiyapruk Analyst, no 57076 [email protected] 66 (0) 2-624‐6236
Core profit to grow 26%YoY We forecast MINT’s core profit to grow 26%YoY to Bt1,041mn, driven by high seasonality of Tivoli (hotels in Portugal) and inorganic growth from the food business. The company has seen some impact from the mourning period on revenue from function rooms and restaurants in Thailand. However, the impact is deemed miniscule compared to the net profit base and this will not significantly affect our 17E TP. The share is currently fully valued, so our Sell rating stands. Tivoli has saved the day While Q3 was the low season in Thailand and the operations in the Maldives and Brazil are still facing headwinds, Tivoli was in its peak season, driving the performance of overseas hotels. The occupancy rate of its overseas portfolio increased by 13%YoY, boosting RevPAR by 11%YoY. Tivoli’s room rates have increased by double‐digit percentages after the renovation. The occupancy rate of owned hotels (include Tivoli) has increased by 9%YoY while RevPAR increased 8%YoY. Oaks’ RevPAR increased 6%YoY due to higher room rates and THB depreciation. Hotel revenue is expected to jump 57% from the consolidation of Tivoli while the margin will be rather flat, dragged down by the poor performance in the Maldives and Brazil. Double‐digit growth for food business in Thailand and China The food business in Thailand and China has shown an excellent performance with SSSG of 5.8% and 4.4% while TSSG was 17.5% and 21.6% from continuous expansion of outlets. Australia’s operation saw SSSG at 1%, turning around from ‐2% last quarter. The Singapore hub still faced hard times from the unfavorable economic situation and its SSSG continued to slump by 7%. We forecast the top line of the food business to grow by 27%YoY to Bt5,474mn as a result of 15% TSSG and consolidation of MinorDKL (operation in Australia). The margin is expected to continue improving as in the last few quarters. The mourning period impacting both hotels and food MINT has seen cancellations of function rooms and hotel rooms worth less than Bt100mn so far and around 80% was from function rooms. However, we think that there should be more concern over consumption sentiment as restaurants’ SSSG in the past week seems to signal a slowdown. We think negative SSSG in Thailand is possible in the worst case. Financials and Valuation FY Ended 31 Dec Revenues (Btmn) Norm net profit (Btmn) EPS (Bt) EPS growth (%) Norm EPS (Bt) Norm EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2013 34,669 3,795 1.04 11.4% 0.97 8.4% 0.35 6.27 2013
2014 37,228 4,250 1.00 ‐4.3% 0.97 ‐0.1% 0.25 6.37 2014
2015 42,432 4,705 1.60 59.9% 1.07 10.7% 0.35 7.45 2015
2016E 52,145 5,433 1.67 4.6% 1.23 15.5% 0.45 8.77 2016E
2017E 54,840 5,854 1.33 ‐20.5% 1.33 7.8% 0.53 9.65 2017E
2018E 60,347 6,564 1.49 12.1% 1.49 12.1% 0.60 10.61 2018E
39.56 28.44 6.10 0.9% 17.2% 74%
39.62 26.98 6.00 0.7% 15.8% 96%
35.79 25.60 5.13 0.9% 23.1% 115%
30.72 19.59 4.34 1.2% 21.1% 96%
28.75 18.33 3.94 1.4% 14.4% 74%
25.64 17.20 3.59 1.6% 14.6% 55%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 4
Figure 1: MINT’s 3Q16 earnings preview Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Extra items Gn (Ls) from affiliates Net profit (loss) Core profit (loss) Reported EPS (Bt) Gross margin (%) EBITDA margin (%) Net margin (%)
3Q15 10,071 5,663 944 (313) 780 (56) 100 173 923 824 0.21 56.2 9.4 8.2
2Q16 12,029 6,871 1,418 (386) 599 (102) 136 30 732 596 0.17 57.1 11.8 5.0
3Q16E 13,420 7,611 1,998 (390) 520 (177) 0 100 1,041 1,041 0.24 56.7 14.9 7.8
%YoY 33.2 34.4 111.7 24.6 (33.3) 216.9 (100.0) (42.2) 12.8 26.4 12.8
%QoQ 11.6 10.8 40.9 1.1 (13.2) 73.7 (100.0) 228.2 42.3 74.8 42.3
Sources: MINT, KT Zmico Research
9M16E 38,602 22,222 6,022 (1,182) 1,697 (577) 2,068 314 5,348 3,280 1.21 57.6 15.6 8.5
%YoY 27.4 26.6 47.0 23.5 1.5 186.8 274.4 (56.7) 47.7 6.9 47.7
%YoY 25.1 26.0 33.9 12.8 21.5 33.4 (11.4) (23.3) 7.2 16.5 7.2
2016E 53,103 31,000 8,372 (1,467) 2,586 (548) 2,068 962 7,549 5,481 1.71 58.4 15.8 10.3
YTD 72.7 71.7 71.9 80.6 65.6 105.3 100.0 32.6 70.8 59.8 70.8
Figure 2: Hotel operation results
Bangkok
Occupancy rate ARR (Bt/room/night) RevPAR (Bt/room/night)
3Q15 65% 4,762 3,115
3Q16 76% 4,585 3,489
Upcountry %ch +11% ‐4% +12%
3Q15 70% 5,863 4,076
Overseas
3Q16 71% 6,075 4,321
%ch +1% +4% +6%
3Q15 62% 6,502 4,001
Oaks
3Q16 72% 5,909 4,441
%ch +10% ‐9% +11%
3Q15 79% 4,214 3,331
3Q16 79% 4,509 3,562
%ch +1% +7% +6%
Sources: MINT, KT Zmico Research
Figure 3: Restaurant operation results 10.0%
10.0%
SSSG by country
TH CH AU
5.0% 0.0%
Total SSSG
5.0%
1.5% 1.2% 0.4% 0.6% ‐1.8%
0.0%
‐1.6%
0.9% ‐0.2% 0.3%
2.3% 3.0%
‐5.0%
‐5.0%
SG
‐10.0%
‐10.0%
‐15.0%
‐15.0% ‐20.0%
‐20.0%
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16
Source: MINT, KT Zmico Research
Figure 4: MINT’s PER band
Figure 5: MINT’s PBV band
(X)
(X) 7.0
40 +2 S.D.
6.0
+1 S.D.
4.0
Avg.
20
3.0
-1 S.D.
Source: Bloomberg, KT Zmico Research
Source: Bloomberg, KT Zmico Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 4
Oct-16
Jan-16
Apr-15
Jul-14
Oct-13
Jan-13
Apr-12
Jul-11
Oct-10
Jan-10
-2 S.D.
Jan-07
Oct-16
Jan-16
Apr-15
Jul-14
Oct-13
Jan-13
Apr-12
Jul-11
Oct-10
0.0
Jan-10
0
Apr-09
1.0
Jul-08
5
Oct-07
-1 S.D.
2.0
-2 S.D.
Jan-07
Avg.
Apr-09
10
+1 S.D.
5.0
25
15
+2 S.D.
Jul-08
30
Oct-07
35
FINANCIAL TABLE PROFIT & LOSS (Btmn) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Gain (loss) from affiliates Extra items Non‐controlling interest Net profit Reported EPS Fully diluted EPS Core net profit Core EPS Dividend (Bt) BALANCE SHEET (Btmn) Cash and equivalents Accounts receivable Inventories Investment PP&E‐net Other assets Total assets ST debt & current portion Long‐term debt Total liabilities Paid‐up shares Shareholder equity Total liab. & shareholder equity CASH FLOW (Btmn) Net income Non‐cash adjustment Depreciation & amortization Change in working capital Cash flow from operations Capex (Invest)/Divest Others Cash flow from investing Debt financing (repayment) Equity financing Dividend payment Others Cash flow from financing Net change in cash Free cash flow FCF per share (Bt) PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2013 34,669 (14,549) 20,120 (16,504) 6,115 (2,498) 3,616 (1,027) 1,431 4,020 (675) 530 306 (80) 4,101 1.04 1.04 3,795 0.97 0.35
2014 37,228 (15,321) 21,907 (18,422) 6,372 (2,887) 3,485 (1,145) 1,584 3,924 (397) 823 152 (100) 4,402 1.00 1.00 4,250 0.97 0.25
2015 42,432 (17,829) 24,603 (21,473) 6,254 (3,124) 3,129 (1,301) 2,128 3,957 (411) 1,254 2,335 (94) 7,040 1.60 1.60 4,705 1.07 0.35
2016E 52,145 (21,616) 30,529 (26,386) 8,357 (4,214) 4,143 (1,467) 2,548 5,224 (542) 962 1,932 (210) 7,365 1.67 1.67 5,433 1.23 0.45
2013 3,370 3,383 1,675 5,959 37,452 8,284 60,124 4,782 18,602 33,249 4,018 26,875 60,124
2014 5,372 3,326 1,942 8,123 39,814 15,703 74,279 6,620 27,461 44,255 4,202 30,024 74,279
2015 4,003 4,960 2,414 10,162 53,002 21,196 95,737 4,101 41,373 59,822 4,642 35,915 95,737
2016E 3,809 6,096 2,966 10,895 56,221 22,418 102,405 9,377 34,850 60,456 4,642 41,950 102,405
2013 4,182 (688) 2,498 (270) 5,722 (7,416) (80) (7,496) (1,000) 3,602 (1,185) 28 1,445 (329) (1,774) (0.44)
2014 4,502 (1,308) 2,887 (693) 5,388 (13,798) 386 (13,412) 11,400 1 (1,401) 26 10,027 2,003 (8,024) (2.01)
2015 7,134 (3,353) 3,124 (3,659) 3,247 (12,821) (1,105) (13,926) 10,147 22 (1,001) 125 9,294 (1,386) (10,679) (2.43)
2016E 7,575 (2,838) 4,214 (1,030) 7,921 (6,000) 673 (5,327) (1,246) 0 (1,541) 0 (2,787) (193) 2,593 0.59
2013 10.7% 12.3% 8.4% 58.0% 17.6% 10.4% 11.8% 10.9% 15.6%
2014 7.4% 4.2% ‐0.1% 58.8% 17.1% 9.4% 11.8% 11.4% 10.1%
2015 14.0% ‐1.9% 10.7% 58.0% 14.7% 7.4% 16.6% 11.1% 10.4%
2016E 22.9% 33.6% 15.5% 58.5% 16.0% 7.9% 14.1% 10.4% 10.4%
2017E 54,840 (22,520) 32,320 (27,777) 9,045 (4,502) 4,543 (1,489) 2,664 5,718 (594) 960 0 (230) 5,854 1.33 1.33 5,854 1.33 0.53
2017E 4,262 6,411 3,119 12,377 52,718 22,815 101,702 7,787 31,072 55,649 4,642 46,053 101,702
2018E 60,347 (24,868) 35,479 (30,395) 9,587 (4,502) 5,085 (1,399) 2,894 6,580 (683) 932 0 (265) 6,564 1.49 1.49 6,564 1.49 0.60 2018E 6,357 7,054 3,433 13,831 49,236 23,223 103,135 12,013 22,567 52,595 4,642 50,540 103,135
2017E 6,084 (960) 4,502 (302) 9,324 (2,000) 478 (1,522) (5,369) 0 (1,981) 0 (7,350) 452 7,803 1.77
2018E 6,829 (932) 4,502 (141) 10,258 (2,020) 477 (1,543) (4,278) 0 (2,342) 0 (6,620) 2,095 8,715 1.98
2017E 5.2% 8.2% 7.8% 58.9% 16.5% 8.3% 10.7% 10.7% 10.4%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 4
2018E 10.0% 6.0% 12.1% 58.8% 15.9% 8.4% 10.9% 10.9% 10.4%
Note: KT ZMICO has two major shareholders, Krungthai Bank PLC (KTB) and Seamico Securities PLC (ZMICO). Therefore, prior to making investments in the securities of KTB and ZMICO, investors should consider the risk factors carefully. An executive of KT ZMICO Securities is also a board member of BCP, BTC, CI, CPI, KBS, MAJOR, MK, PACE, PSL, SVH, VNG, ZMICO, SAWAD, TFG. A management member of KT ZMICO Securities is also a board member of BTC and NFC. KT ZMICO is a financial advisor for U, LOXLEY, ZMICO, MAKRO, CPALL, SAFARI, PACE, TPOLY, M‐CHAI, TFD, SUTHA. KT ZMICO is a co‐underwriter of ALLA.
Corporate Governance Report (CGR) Source: Sec, Thai Institute of Directors Association (IOD) Excellent (scores: 90 ‐ 100) Very Good (scores: 80 – 89) Good (scores: 70 – 79)
Satisfactory (scores: 60 – 69) Pass (scores: 50 – 59) No Logo N/A (scores: below 50)
Anti‐corruption Progress Indicator Source: Sec, Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC)
Level 1 (Committed) : Organization’s statement or board's resolution to work against corruption and to be in compliance with all relevant laws. Level 2 (Declared) : Public declaration statement to participate in Thailand's private sector Collective Action Coalition Against Corruption (CAC) or equivalent initiatives Level 3 (Established) : Public out preventive measures, risk assessment, communication and training for all employees, including consistent monitoring and review processes Level 4 (Certified) : Audit engagement by audit committee or auditors approved by the office of SEC, and receiving certification or assurance by independent external assurance providers (CAC etc.) Level 5 (Extended) : Extension of the anti‐corruption policy to business partners in the supply chain, and disclosure of any current investigations, prosecutions or closed cases Insufficient or not clearly defined policy Data not available / no policy
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS
SECTOR RECOMMENDATIONS
BUY: Expecting positive total returns of 15% or more OVERWEIGHT: The industry, as defined by the analyst's over the next 12 months coverage universe, is expected to outperform the relevant OUTPERFORM: Expecting total returns between ‐10% primary market index by at least 10% over the next 12 months. to +15%; returns expected to exceed market returns NEUTRAL: The industry, as defined by the analyst's coverage over a six‐month period due to specific catalysts universe, is expected to perform in line with the relevant UNDERPERFORM: Expecting total returns between primary market index over the next 12 months. ‐10% to +15%; returns expected to be below market UNDERWEIGHT: The industry, as defined by the analyst's returns over a six‐month period due to specific coverage universe, is expected to underperform the relevant catalysts primary market index by 10% over the next 12 months. SELL: Expecting negative total returns of 10% or more over the next 12 months
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 4
th
th
th
th
KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
th
Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
