MINT Advances for Second Straight Day as Core Loss Narrow in 2Q21

The share price of Minor International Public Company Limited (MINT) rose ฿1.00/share or 3.17% to ฿32.50/share as of 12:23 local time in Thailand, with a trading value of 419 million baht.

MINT gained for the second straight day after reporting better-than-expected 2Q21 earnings, posting a core loss of 3.4 billion baht, improving both q-q and y-y, from a core loss of 5.2 billion baht in 1Q21 and 7.2 billion baht in 2Q20, respectively. The y-y improvement was a result of the recovery of MINT’s hotel business, principally in Europe, together with its food business. 

KTBST Securities (KTBST) maintains a BUY rating on MINT but raises target price to 38.00 baht from 35.00 baht based on DCF, assuming WACCof 7% and terminal growth of 2.5%, following KTBST earnings forecast upgrades. 

MINT held an analyst meeting yesterday (August  18). KTBST is increasingly positive about earnings outlook, as the company expected core earnings to turn positive in 3Q21E after the NH hotels’ occupancy rate reached 50-60% in July-August with a possibility to hit the year’s high in September. 

KTBST upgraded 2021E/2022E core earnings forecast by 42%/5% to reflect the stronger-than-expected improvement in the NH hotels’ RevPar and gross profit margin. In the near term, KTBST saw core loss narrowing YoY, QoQ in 3Q21E as the company is set to record a gain of 1.0 billion baht from selling two Tivoli hotels. KTBST forecasts core earnings to turn positive in 2022E in light of the strong recovery in the NH hotels. 

MINT outperformed the SET Index by 6% over the past month, compared to its peers ERW of +3% and CENTEL of -1%. KTBST believes a further improvement in the NH Hotels will likely continue to lend further support. The stock currently trades at 2022E EV/EBITDA of 15x, which implies -1.0 SD below its 10-yr average while ERW trades at -0.5 SD and CENTEL at its average level.