Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Equity Bottom-Up

<ul><li>We maintain an Outperform rating, viewing the stock as fundamentally attractive with upside of 28% compared to the fair value (FV) of Bt33.50, based on a required return of 3.8%.</li><li>The short-term tactical perspective has become more positive, as the stock price has declined 7% QTD, likely reflecting the weak 3Q24 performance.</li><li>We remain negative on the long-term performance as the company enters a slow-growth phase, with expected EPS growth at a CAGR of just 1% for 2024-26E, primarily because the F&amp;B business has yet to pick up.</li></ul>

We maintain an Outperform rating, viewing the stock as fundamentally attractive with upside of 28% compared to the fair value (FV) of Bt33.50, based on a required return of 3.8%.The short-term tactical perspective has become more positive, as the stock price has declined 7% QTD, likely reflecting the weak 3Q24 performance.We remain negative on the long-term performance as the company enters a slow-growth phase, with expected EPS growth at a CAGR of just 1% for 2024-26E, primarily because the F&amp;B business has yet to pick up.

Minor International - In-Line 3Q24 NP; 4Q24E Earnings to Decline QoQ on Seasonality

<ul><li>We have downgraded our rating to Outperform (previously Buy) due to a more negative outlook on the long-term earnings growth prospects.</li><li>We have also revised our expected CAGR for EPS in 2024-26E down to just +1% (from +11%), reflecting a weaker-than- <span style="font-size: var(--content-font-size);">expected performance in the F&amp;B sector, which is below the </span>industry average of +10%.</li><li>The stock remains attractive from a fundamental valuation perspective, with 23% upside to the new fair value of Bt33.50 (previously Bt39.25), based on a required return of 3.8% (previously 4.0%). </li></ul>

We have downgraded our rating to Outperform (previously Buy) due to a more negative outlook on the long-term earnings growth prospects.We have also revised our expected CAGR for EPS in 2024-26E down to just +1% (from +11%), reflecting a weaker-than- expected performance in the F&amp;B sector, which is below the industry average of +10%.The stock remains attractive from a fundamental valuation perspective, with 23% upside to the new fair value of Bt33.50 (previously Bt39.25), based on a required return of 3.8% (previously 4.0%). 

Minor International - 2024E Earnings Already Peaked for the Year

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>This is a follow-up to our initial report on the APAC Luxury Industry where we were of the belief that small niches within the luxury sector could offer potential opportunities.</li>
<li>Below, we analyse the recent trends in luxury travel on <a href="https://www.smartkarma.com/entities/minor-international-pcl" target="_blank" data-smartkarma-citation="entities:2154:1" rel="noopener">Minor International (MINT TB)</a>, <a href="https://www.smartkarma.com/entities/mandarin-oriental-international-ltd" target="_blank" data-smartkarma-citation="entities:4773:1" rel="noopener">Mandarin Oriental International (MAND SP)</a> and <a href="https://www.smartkarma.com/entities/shiseido-co-ltd" target="_blank" data-smartkarma-citation="entities:5718:1" rel="noopener">Shiseido Company (4911 JP)</a>.</li>
<li>While travel has rebounded to pre-pandemic levels, Shiseido's Travel Retail struggles, yet Minor International and Mandarin Oriental are showing signs of improvement. </li>
</ul>


This is a follow-up to our initial report on the APAC Luxury Industry where we were of the belief that small niches within the luxury sector could offer potential opportunities.
Below, we analyse the recent trends in luxury travel on Minor International (MINT TB), Mandarin Oriental International (MAND SP) and Shiseido Company (4911 JP).
While travel has rebounded to pre-pandemic levels, Shiseido's Travel Retail struggles, yet Minor International and Mandarin Oriental are showing signs of improvement. 


APAC Luxury Industry Series Update: The Growth of Luxury Travel Unmatched by Dull Share Prices

<ul><li>MINT reported a 2Q24 core profit of Bt3.2bn (+8% YoY and a turnaround from the loss of Bt352mn in 1Q24), slightly below our projection by 6% due to a narrower-than-expected GPM from hotels.</li><li>We anticipate an improvement in 2H24E core profit, driven by the high season in Europe and the beginning of the peak tourism season in Thailand in 4Q24E.</li><li>We project two-year earnings growth (2024-26E) at a CAGR of +11%. </li></ul>

MINT reported a 2Q24 core profit of Bt3.2bn (+8% YoY and a turnaround from the loss of Bt352mn in 1Q24), slightly below our projection by 6% due to a narrower-than-expected GPM from hotels.We anticipate an improvement in 2H24E core profit, driven by the high season in Europe and the beginning of the peak tourism season in Thailand in 4Q24E.We project two-year earnings growth (2024-26E) at a CAGR of +11%. 

Minor International - In-Line 2Q24 Core Profit

<ul><li>We initiate our coverage on MINT with an Outperform rating and a 12-month FV of Bt39.25, based on the 12M earnings yield of 3.6%.</li><li>Our valuation metrics indicate significant upside of +33%, with core EPS growth of +11% expected during 2024-26E as RevPAR should surpass pre-COVID levels.</li><li>However, the tactical view is neutral.</li></ul>

We initiate our coverage on MINT with an Outperform rating and a 12-month FV of Bt39.25, based on the 12M earnings yield of 3.6%.Our valuation metrics indicate significant upside of +33%, with core EPS growth of +11% expected during 2024-26E as RevPAR should surpass pre-COVID levels.However, the tactical view is neutral.

Minor International - Entering the High Season in 2-3Q24E

Thailand

Minor International PCL is a global company focused on three primary businesses including restaurants, hotels and lifestyle brands distribution.

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Minor International (MINT TB)

Minor International - In-Line 3Q24 NP; 4Q24E Earnings to Decline QoQ on Seasonality

We maintain an Outperform rating, viewing the stock as fundamentally attractive with upside of 28% compared to the fair value (FV) of Bt33.50,...

Krungthai XSpring

Minor International - 2024E Earnings Already Peaked for the Year

We have downgraded our rating to Outperform (previously Buy) due to a more negative outlook on the long-term earnings growth prospects.

Krungthai XSpring

Minor International - In-Line 2Q24 Core Profit

We anticipate an improvement in 2H24E core profit, driven by the high season in Europe and the beginning of the peak tourism season in Thailand in...

Krungthai XSpring

Minor International - Entering the High Season in 2-3Q24E

We initiate our coverage on MINT with an Outperform rating and a 12-month FV of Bt39.25, based on the 12M earnings yield of 3.6%.

Krungthai XSpring

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Minor International - In-Line 3Q24 NP; 4Q24E Earnings to Decline QoQ on Seasonality

We maintain an Outperform rating, viewing the stock as fundamentally attractive with upside of 28% compared to the fair value (FV) of Bt33.50,...

Krungthai XSpring

Minor International - 2024E Earnings Already Peaked for the Year

We have downgraded our rating to Outperform (previously Buy) due to a more negative outlook on the long-term earnings growth prospects.

Krungthai XSpring

APAC Luxury Industry Series Update: The Growth of Luxury Travel Unmatched by Dull Share Prices

While travel has rebounded to pre-pandemic levels, Shiseido's Travel Retail struggles, yet Minor International and Mandarin Oriental are showing...

Oshadhi Kumarasiri

Minor International - In-Line 2Q24 Core Profit

We anticipate an improvement in 2H24E core profit, driven by the high season in Europe and the beginning of the peak tourism season in Thailand in...

Krungthai XSpring

Minor International - Entering the High Season in 2-3Q24E

We initiate our coverage on MINT with an Outperform rating and a 12-month FV of Bt39.25, based on the 12M earnings yield of 3.6%.

Krungthai XSpring