Minor International

Minor International Plc (MINT)  
Given its strong earnings outlook, we believe MINT’s share price is once again on the road north after a long period of de-rating. We expect strong 2Q12 results to lead to mass earnings upgrades, which should catalyse its share price.We continue to like MINT on the back of its well-diversified business model, strong earnings outlook, high ROE and attractive valuation.
Reiterate Outperform with an unchanged THB18.90 target price, still based on 16x CY13 P/E, 1 SD below its five-year historical average. 
What Happened
Following our recent telephone discussion with management, we are confident that the market is still underestimating MINT’s earnings potential. We expect its hotel business to continue to do well on the back of strong tourist arrivals in Thailand and high occupancy rates at its Oaks
Hotels and Resorts in Australia. Its food business should also flourish; we estimate same-store-sales growth was 5-6% in 2Q12.
What We Think
We estimate MINT’s 2Q12 earnings surged 70% yoy to THB474m. Our numbers are well above consensus and we expect the market to upgrade forecasts following the strong anticipated 2Q12 numbers. This in turn should catalyse its share price.In fact, we believe that MINT’s earnings will gain momentum with 30% EPS CAGR over the next three years, which should re-rate the stock
further after a long period of de-rating. It is one of only a few cheap consumer stocks left in the market.
What You Should Do
Stay invested. We still like MINT for its solid earnings growth outlook and attractive valuation and believe the stock deserves a re-rating.We reiterate our Outperform call with an unchanged target price of THB18.90, based on 16x CY13 P/E, which is still conservative at one standard deviation below its five-year historical average.
Ahead of consensus
Following our telephone discussion with MINT management, we strongly believe that the street has underestimated the company’s earnings potential. Note that our forecasts are 19% above consensus for this year and 27% above for next year. We expect MINT to report strong 2Q12 numbers, which will lead to earnings upgrades by the market. This in turn should drive its share price higher.