SHR's weak Q2 gives way to bond funding and a sector-wide recovery call
Middle East tensions hit Maldives and Mauritius bookings War worries kept Middle East tourists away, cutting revenue per room at SHR's Maldives and Mauritius hotels by 8-10% and pushing Q2 into a small loss. That is why profit forecasts and one broker's target price were cut.
Explains the main force that hurt SHR's earnings and share price this period.
Q2 revenue holds up as Fiji, Phuket and Samui shine SHR still booked 2.27 billion baht of Q2 revenue and paid a small interim dividend. Fiji set a record quarter with nearly 90% of rooms filled, while Phuket and Koh Samui revenue per room rose 22% and 14%. Management expects a much stronger second half.
Shows the actual results and the bright spots that offset the Middle East drag.
1.7 billion baht bond sale fully subscribed at 4.50% SHR raised 1.7 billion baht from a 2-year-9-month bond paying 4.50% a year, with strong investor demand. The money repays maturing debt and funds hotel renovations, easing near-term repayment pressure and improving the rooms that drive future income.
A completed funding event that strengthens the balance sheet and pays for growth.
Brokers turn positive on hotels, but SHR lags peers Tisco started SHR with a buy and 2.20 baht fair value, KGI kept buy at 1.90 baht, and DAOL stayed overweight on tourism as arrivals rebounded 8% in early October. Still, most top picks were rivals like ERW and CENTEL, and a travel-subsidy delay was a mild negative.
Captures the improving sector mood and SHR's place in it, including the caveat.