Minor International PCL (MINT) reported core revenue of 6,682 million baht in the second quarter of 2020, decreased by 79 per cent compared to the same period in 2019.

MINT’s net loss in the second quarter was 8,448 million baht (7,162 million baht on core loss). When compared to the same period in 2019, the number has shrunk by -573 per cent. 

The shortfall in revenue was attributed to a challenging environment for all three business units across all regions, prominently at Minor hotels from the COVID-19 pandemic. 

The businesses were pressured by lower sales flow-through from travel restrictions and lockdown of countries globally.

MINT’s operation on hotels, which is 71 per cent of the revenue in 2019, saw a drop in its owned and leased hotels 95 per cent year-on-year and 92 per cent quarter-on-quarter on the low occupancy rate of 6 per cent.

Most of MINT’s hotels have reopened, primarily serving locals as the country has yet to accept tourists. The company expects around 90 per cent of all its hotels to open in September. 

As analysts forecasted 

MINT’s financial performance in the second quarter was not a surprise to many analysts since COVID-19 has severely impacted the tourism sector.

Bualuang Securities predicted a deep loss of 6 billion baht on MINT due to hotel and restaurant closures. The narrower loss is expected in the third quarter which will result from top-line recovery and intense cost savings. Earning would turn around in the fourth quarter.

An analyst from SCB Securities expects a core loss of 11 billion baht for 2020, increasing from the earlier estimate of 5.8 billion baht. 

SCB expects the second quarter to bottom out for MINT, with operational improvement in 2020 and 2021, as hotels have reopened and MINT began to slash costs to alleviate the business.

In the same way, Kasikorn Securities also expected lower losses in the third quarter due to government relief measures for both Thailand and overseas markets. They also said that the worst has passed.

According to the Kasikorn report, the analyst said that they believe progress in developing a COVID-19 vaccine will be a positive short-term catalyst for the stock.

Kasikorn hold the unchanged ‘BUY’ target price on MINT at 23.25 baht per share 

SCB still recommends ‘BUY’ on MINT with the target price of 24 baht per share, while stating that the key risk is a more severe pandemic that forces another lockdown and halt of economic activities. 

On Friday morning trade at 10:38 a.m., MINT shares stood at 20.50 baht per share, decreased 0.30 baht or -1.44 per cent. 

Earlier on Tuesday, MINT rose up 10.38 per cent when the market closed with a transaction value of 3,462 million baht.

 

THAI Enquirer