Minor International

Minor International Plc (MINT)

Q1 2013 profit projected to hit new high with B1.44bn, growing 13% YoY
MINT’s 1Q13 net profit is estimated to hit quarterly new high with B1,441m
or 13% YoY growth due to the hotel business that has been vigorous all
along during festive season and Chinese New Year festival, boosting the
average occupancy rate of every hotel to 76% from 73% in 1Q12. For the
average revenue per available room (RevPar), it has risen by 3% YoY
(considering RevPar of only MINT’s own-equity hotels, it is found to grow by
22% YoY). Other than that, the company has started to recognize revenue
from 2 new hotels in Vietnam with 159 rooms in total after the acquisition
in last early-February. Accordingly, the revenue from hotel business (40%
of total revenue) is projected to grow by 15% YoY. For property business,
MINT is projected to recognize B550m of revenue from transfer of St. Regis
condominium worth of B100m and B450m from Timeshare project. In
regard to food business (39% of total revenue), it is estimated to grow by
14.6% YoY due to 4.1% growth of same-store sales, together with
expansion of 142 new branches from 1Q12 (increasing by 25 branches from
4Q12) to 1,406 branches. In addition to this, the revenue growth is also
partially a result of 49% acquisition of Riverside in China since late-
December 2012. Overall, MINT’s operating revenue in 1Q13 is projected to
stand at B9.23bn, increasing by 10.5% YoY. Additionally, EBITDA margin is
estimated to rise to 26%.ses; sources of capital will be internal cash flow,
warrant conversion, and loans.
- Every business still likely on bright side. 2013 profit projected to grow 18% YoY
The rest of 2013 is still likely to be on bright side because MINT would open
3 more hotels (110 rooms in total) with its own equity, and would also
recognize revenue from other 9 new hotels with roughly 1,000 rooms under
the company’s management. Accordingly, the average occupancy rate in
2013 is projected to be driven to 72-73% and the average revenue per
available room (RevPar) is projected to heighten by 12% YoY. In terms of
property development business, revenue from 3-4% transfer of St. Regis
condominium worth of B200m is awaiting to be recognized. For Timeshare
project, 2013 revenue is projected to increase to B2.3bn from B1.5bn as a
result of unit expansion from 46 to 100 units at least. Regarding food
business, 4-5% growth is projected to be from same-store sales and 8-10%
growth is projected to be from a plan of continuous branch expansion. We
maintain our FY2013 forecast, estimating MINT’s net profit at B4bn or 18%
YoY growth.
-  “BUY”… 2013 FV is B29.00
We reiterate our recommendation of “BUY” for MINT. 2013 fair value, using
DCF (9.4% WACC), is B29.00 with 20% upside.