Minor International (MINT) - The Nation

SCB Securities July 27, 2012 4:11 pm

Minor International Plc (MINT)

Q2 2012's net profit projected at Bt436mn, growing 56% yoy

We estimate Q2 2012's net profit of MINT at Bt436 mn, the growth of 56% yoy due to 3 reasons as follows. 1) The hotel business has recovered continuously following the tourism industry. As a result, average occupancy rate (Oaks excluded) has increased to 55% from 49% in Q2 2011, while RevPar has grown by 20.5% yoy. Moreover, there was recognition of revenue from Oaks Hotels & Resorts in Australia for a full quarter at least by Bt1bn, compared with in Q2 2011 that MINT could recognize revenue from Oaks for only 1 month. 2) For the property development business, MINT would book revenue of Bt460mn from a transfer of St. Regis condominium (B200m) and Timeshare business (Bt260mn). 3) For the food business, same-storesales have grown by 6.5%. Combined with the number of restaurant which has increased by 105 from Q2 2011, or 10 from Q1 2012 to 1,274, the business would grow totaling by 13.6%yoy. Overall, we estimate operating profit in Q2 2012 of MINT at Bt7bn, increasing 20.5% yoy, while net profit margin would rise to 6.2% from 4.8% in Q2 2011.

Maintain forecast. 2nd half 2012?s outlook still thrives continuously from every business

Earnings in 2nd half 2012 tend to grow continuously. The hotel business would brighten along with recovering tourism industry that supports all hotels to be able to fully generate revenue. Especially, new hotels like Maldives and St. Regis began to have better earnings after starting a full operation for the first year. Combined with Oaks which has high occupancy rate, the hotel business would grow notably. In the first 15 days of July, average occupancy rate of the business has enlarged by 3%yoy, while room rate has increased 7% yoy. For the property development business, there would be revenue recognition from Timeshare business at B600-700 mn (compared with Bt330 mn in 2half 2011) and from a transfer of St. Regis condominium at Bt300-400 mn (5-7% still awaiting transfer). Together with the food business which has grown along with the economy and aggressive branch expansion, as well as a chance to receive remaining insurance claims (before tax) at Bt120 mn, operating profit in 2H12 would grow remarkably from 2nd half 2011 and thus boost operating profit in fiscal year 2012 to Bt2.96 mn or the growth of 43% yoy.

Buy on price weakness. 2012's fair value is Bt16.00

New 2012's fair value, using DCF-WACC at 9.4%, is Bt16.00. Although the upside is small at only 4%, the company still has strong business fundamental and growth potential from future acquisition plan. Reiterate "buy on weakness".

Latest stories in this category

Source: http://www.nationmultimedia.com/business/Minor-International-(MINT)-30187128.html

dick clark new years eve brock lesnar vs alistair overeem times square new years eve liquor store how to tie a bow tie diverticulitis jello shots