Thai Hotel Sector Could Face Further Loss in 2Q as Uncertainty from Covid-19 Remains

Due to the resurgence of Covid-19 outbreak since December, 2020, DBS Vickers Securities (DBSVS) expected stocks in the hotel sector could face deeper loss in 1Q21F compared to 4Q20F, in particular MINT, ERW and CENTEL. 3 aforementioned stocks are estimated to report a net loss of 5,500 million baht, 472 million baht and 527 million baht in 1Q21F, respectively.  


For the 2Q21F, uncertainty remains in Thailand’s hotel sector as the Covid-19 crisis continues to affect the industry. More than 1,000 daily coronavirus infections have been reported since the third wave started in early April. 


Together with harsh measures including inter-provincial travel restriction, ban on indoor dining at restaurants and etc. in effort to tackle the pandemic, DBSVS believed it could impact businesses in both tourism and food industries significantly. 


Since the situation in Europe is improving and many countries in this region like France and Italy aim to ease lockdowns from May onwards, DBSVS foresaw MINT to gain benefits from it.  


Hence, DBSVS raised MINT as Top Pick of the hotel sector, giving a target price at ฿36.00/share ahead of meaningful recovery in Europe and its share price as of now is still below the pre-Covid levels. ERW is under revision, but a target price given at ฿4.60/share. While recommending CENTEL at fully valued with a target price of ฿29.00/share.

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