ERW : COVID-19 Significantly Impact to 2020 Earnings

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Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

Pi Research

Thai Equity - Bottom-up - Equities

Leading, full-service investment firm in Thailand

Pi Securities PCL, Thailand

Pi Securities is a well known securities company with 40 years experience in the industry, serving more than 60,000 clients. We offer one - stop service providing full range of financial products and services including extensive Brokerage, Proprietary Trading (Equities and Bonds), Advisory Services, Structured Products.

Moreover, our new research team tailored for institutional clients to focus on mid to small cap of Thai equities and trading strategies. Our services offered to our premium clients also include arrangement of company or site visits to with the managements of Thai listed companies.

Note: Effective on 1 March 2022, Country Group Securities PCL changed its name to Pi Securities

Equity Bottom-Up

We initiate coverage of ERW with a BUY rating and a 2020 target price of Bt7.97, based on  32.4xPE’20E, which represents a relative PE of 1.31x to the Thai Consumer Discretionary Sector.
The story:
<ul>
<li>Well-diversified hotel portfolio in Thailand</li>
<li>Foreign tourist numbers starting to recover</li>
<li>Expect strong earnings growth in 2020E</li>
<li>Hop INN to benefit from domestic tourism growth</li>
<li>Plenty of room for overseas expansion</li>
</ul>
Risks:
<ul>
<li>High competition in the hotel industry</li>
<li>Dependency on third-party hotel management companies</li>
<li>Appreciation of the Thai baht</li>
</ul>

We initiate coverage of ERW with a BUY rating and a 2020 target price of Bt7.97, based on  32.4xPE’20E, which represents a relative PE of 1.31x to the Thai Consumer Discretionary Sector.
The story:

Well-diversified hotel portfolio in Thailand
Foreign tourist numbers starting to recover
Expect strong earnings growth in 2020E
Hop INN to benefit from domestic tourism growth
Plenty of room for overseas expansion

Risks:

High competition in the hotel industry
Dependency on third-party hotel management companies
Appreciation of the Thai baht


ERW: Pure Hotel Player in Key Strategic Locations

Erawan Group

ERW: Pure Hotel Player in Key Strategic Locations