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Central Plaza Hotel Pcl (SET:CENTEL), is a Thailand-based company engaged in the operation of hotels, food and ice cream outlets. CENTEL is one of the subsidiaries of the Central Group, a family-owned holding company, which has interests in several retail businesses, including Central Pattana Pcl and Robinson Department Store Pcl. As of May 12, 2016, Mr. Tiang Chirathivat, founder of the Central Group, and families, hold about 15.48% of CENTEL shares.
CENTEL owns and operates hotels and resorts, as well as managing hotels and resorts under management agreements, across Thailand and other countries, including Centara Grand at CentralWorld, Sofitel Centara Grand Bangkok, Centara Grand Beach Resort & Villas Krabi, Centara Villas Phuket and Novotel Centara Hat Yai, among others. As of March 31, 2016, the company has a total of 62 hotel properties in its portfolio with a total of 12,899 rooms.
It also operates fast casual restaurants and dining, which are KFC, Mister Donut, Auntie Anne’s, Pepper Lunch, Beard Papa’s, Chabuton, and Cold Stone Creamery, among others. Its subsidiaries include Centara Learning Centre Company Limited and Kata Phuket Hotel Company Limited.
Central Plaza Hotel said on May 13, 2016 that its first-quarter 2016 revenues were 5.19 billion baht, beating the 5.10 billion baht consensus estimate of 3 analysts, according to the Financial Times. CENTEL posted first-quarter 2016 earnings of 0.56 baht per share, exceeding the 0.49 baht per share consensus estimate of 2 analysts.
For 2015, the company reported a dividend of 0.5 baht per share, a 25.0% increase from 2014. The 17 analysts covering the company expect dividends of 0.57 baht per share for the upcoming fiscal year, representing a year-over-year increase of 14.20%.
In a company press release, Central Plaza Hotel said the company’s hotels in Thailand achieved a record average occupancy of 87.1%, as international tourist arrivals in Thailand rose 15.5%, to 9 million, in the first-quarter 2016. During the quarter, the company added another 8 quick service restaurant (QSR) outlets to the network and now has a total of 800 QSR outlets, with same-store-sales growth of -0.1%.
From our technical viewpoint, CENTEL has been range-bound between the 28 baht and 43 baht levels since 2013. The stock tried to break out of the trading range in December 2015 and has since pulled back. CENTEL is now threatening to break down the ascending triangle chart pattern, as analysts turned bearish on the stock.
Investors may also be concerned about the high P/E (TTM) multiple of 32.08. Although the number of international visitors has risen, one may need to be cautious as the luxury-hotel space is competitive and the hotels and resorts under Central Plaza Hotel’s management are high-end.
According to the Financial Times, the consensus amongst 20 polled investment analysts covering CENTEL gave the company an HOLD rating, with the median 12-month price target of 43 baht a share, as of July 8, 2016.
Disclosure: No position and no recommendation. |
