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Central Plaza Hotel Public Company Limited 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 7, 2015, Mr. Tiang Chirathivat, founder of the Central Group, and families, hold about 14.37% of CENTEL shares.
CENTEL owns and operates hotels and resorts, as well as manages 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.
It also operates fast casual restaurants and dining, which are KFC, Mister Donut, Auntie Anne’s and Pepper Lunch, Beard Papa’s and Chabuton, Cold Stone Creamery, among others. Its subsidiaries include Centara Learning Centre Company Limited and Kata Phuket Hotel Company Limited.
Central Plaza Hotel said on February 29, 2016, that its full year 2015 revenues were 18.94 billion baht, missing the 19.17 billion baht consensus estimate of 19 analysts, according to the Financial Times. The company posted full year 2015 earnings of 1.24 baht per share, missing the 1.33 baht per share consensus estimate of 21 analysts.
According to Reuters, international tourist arrivals in Thailand rose 15% in January from a year earlier. Top on the list are Chinese tourists, about 26.7% of the 3 million international visitors registered in January 2016. The government has forecast a record 32 million arrivals this year, up 7.1% from last year's 29.88 million. Tourism accounts for about 10% of Thailand's gross domestic product (GDP).
Although the number of international visitors rose, one may need to be cautious that the hotels and resorts under Central Plaza Hotel management are high-end and luxury hotel space is competitive.
From our technical viewpoint, CENTEL is moving in an ascending triangle chart pattern with head resistance at 43 baht a share. The stock hit an all-time high of 48.25 baht a share in early December 2015 and has since pulled back. CENTEL just bounced off the lower trendline support of the ascending triangle and could be heading to a new all-time high after breaking out the head resistance at 43 baht a share.
Investors seem not to be concerned about the high P/E (TTM) multiple of 28.27, as revenue and earnings growth are still intact. The company’s outstanding shares are 1.35 billion, while only 431.89 million shares are free float for public trading. If the demand remains high, the P/E multiple and the share price will probably remain buoyant.
According to the Financial Times, the consensus amongst 21 polled investment analysts covering CENTEL gave the company an Outperform rating, with the median 12-month price target of 43 baht a share.
Disclosure: No position and no recommendation. |
