Introduction

In this detailed examination, we delve into the financial prospects and strategic initiatives of Minor International PCL (MINT), as presented in the latest report by UOB Kay Hian. This analysis provides a comprehensive overview of MINT’s current standing and future outlook, highlighting the company’s robust performance, strategic focus, and investment potential.

Minor International (MINT TB): A Promising Investment

MINT is recognized as one of the largest hospitality companies within the Asia-Pacific region. Its operations span across hospitality, restaurant management, residential property development, and retail trading. The company’s strategic direction and robust performance were extensively discussed in the 3Q24 analyst meeting, which exuded a positive outlook for the future.

3Q24 Analyst Meeting Highlights

The recent analyst meeting unveiled MINT’s impressive core earnings growth in Q3 2024, with promising projections for Q4 2024. The company is channeling its efforts towards developing a significant Real Estate Investment Trust (REIT), expected to materialize within the next 12-18 months with an estimated value of US\$1.5 billion. This endeavor is aimed at substantial deleveraging and reinvestment opportunities, potentially including ventures into entertainment complexes.

Strategic Focus on Asset-Light Expansion

MINT continues to pursue asset-light expansions, focusing on hotel management contracts that generate revenue without incurring operational costs or capital investments. This strategy allows MINT to maintain high profit margins while expanding its portfolio. Currently, MINT boasts 561 hotels, with 114 projects signed and 173 under negotiation. By 2026, MINT aims for its asset-light portfolio to constitute 50% of total rooms, up from the current 31%.

Financial Highlights and Projections

MINT’s financial trajectory is promising, with net profits projected to rise significantly from Bt8,007.5 million in 2024 to Bt12,479.1 million by 2026. The company’s EBITDA margins are expected to stabilize around 24-25%, reflecting efficient cost management and revenue growth strategies. The report maintains a “BUY” recommendation with a target price of Bt38.00, citing MINT’s diverse customer base, adaptive growth plans, and substantial REIT potential as key investment drivers.

3Q24 Financial Performance

MINT’s Q3 2024 results showcased a robust core profit of Bt2.6 billion, aligning with expectations and surpassing consensus estimates. Revenue increased year-over-year by 3.9%, driven by strong performances in the European and Thai hotel markets. Despite a significant non-core foreign exchange impact, core earnings remained unaffected, with expectations of favorable foreign exchange movements in Q4 2024 to offset previous losses.

Outlook for Q4 2024

Looking ahead, MINT anticipates continued growth in Q4 2024, despite Europe entering a lower travel season. Booking trends for November and December 2024 indicate a high single-digit revenue growth year-over-year in Europe, with Asia showing even stronger RevPAR and revenue growth figures. This positive outlook supports the sustained “BUY” recommendation.

Valuation and Recommendation

UOB Kay Hian maintains a “BUY” status for MINT, setting a target price at Bt38.00 based on a 2025 EV/EBITDA multiple of 9.0x. MINT’s valuation is considered attractive, with the potential for significant upside driven by strategic initiatives and market positioning.

Environmental, Social, and Governance (ESG) Initiatives

MINT is committed to sustainability, pledging net zero emissions by 2050 and implementing resource conservation strategies. Socially, MINT enforces strict occupational health and safety guidelines and ensures supplier compliance. Governance practices include setting non-financial KPIs for senior management to align with internal control, sustainability, and human resource management objectives.