Shangri-La Asia 0069

[winston]

not vested

Shangri-La Asia (69 HK): Interim results beat! PATMI up 148% YoY to 67% of full-year forecast

Shangri-La Asia’s (69 HK, “Shangri-La”) 1H18 results were solid with PATMI increasing 147.8% YoY to US$152.9m or 67.2% of our full-year forecast.

1H18 PATMI also comes to 65.9% of the street consensus estimate of US$232.0m.

1H18 revenue increased 18.8% YoY to US$1.2b or 49.8% of our full-year forecast, while EBITDA increased 22.2% to US$301.5m.

The 78% YoY increase in share of profit of associates took us by surprise, with 1H18 numbers making up 69% of our full-year forecast.

Weighted average RevPAR grew by 14% YoY, supported by a 13% increase in China and a 14% increase in RevPAR in Hong Kong.

Since our initiation, the counter has fallen 30% before closing at HK$11.50 yesterday.

We believe this share price weakness has been due to worries over a sharp slowdown in RevPAR growth in China – China’s July RevPAR growth came to 0.8% YoY (USD terms), according to Smith Travel Research.

We believe these fears have been overblown. With this set of results, should 2H18 be a mere repeat of 2H17, full-year PATMI would be 10% higher than our current FY18 forecasts.

Recall that we expected Shangri-La’s PATMI to increase 16% YoY in FY18 and 4% YoY in FY19.

We continue to see Shangri-La as a proxy to what we expect to be a multi-year recovery in the mainland Chinese luxury hotel industry and see value at current price levels.

Source: OCBC

[winston]

not vested

Shangri-La Asia: Making lux affordable

Shangri-La Asia’s (69 HK, “Shangri-La”) 1H18 results were solid with PATMI increasing 147.8% YoY to US$152.9m or 67.2% of our initial full-year forecast.

Since our initiation, the counter has fallen 28% before closing at HK$11.80 on 24 Aug. We believe this share price weakness has been due to worries over a sharp slowdown in RevPAR growth in China in USD terms due to trade war uncertainties and RMB weakening.

We believe these fears have been overblown. With this set of results, should 2H18 be a mere repeat of 2H17, full-year PATMI would be 10% higher than our initial FY18 forecasts.

While we believe China’s RevPAR growth will moderate downwards given 2H17’s high base, we expect the favorable demand-supply situation to persist for the next two to three years.

After lowering our premium to peer EV/EBITDA to 10% given dampened investor sentiment, our SOTP fair value dips slightly from HK$21.05 to HK$20.00.

Source: OCBC

[behappyalways]

Shangri-La Asia announced a smaller loss in FY2022
https://www.theedgesingapore.com/capita ... oss-fy2022

[behappyalways]

Shangri-La Asia is back to black with 1H2023 net profit, but NAV dips marginally
https://www.theedgesingapore.com/capita ... marginally

[behappyalways]

Shangri-La Asia reverses previous losses with FY2023 earnings of US$184.1 mil
https://www.theedgesingapore.com/capita ... us1841-mil