Tourism/Hotel

Vigorous tourism in high season Neutral

Tourism/Hotel

- December foreign tourist volume makes new high

Thai tourism has rebounded in high season. December foreign tourist

volume made a new high at 2.84 million, with the year's largest growth of

11.8%yoy and 16.5%mom. Thus, 2014 total foreign tourist volume was

24.78 million, falling 6.7%yoy (plunging 8.6%yoy in 11M14).

- No negative factor. Blissful tourism in 2015

Foreign tourists are anticipated to regain confidence and Thai tourism is

expected to return to normal in 2015. No political unrest is likely to take

place this year as the government should be able to keep the political

situation under control. In addition, thanks to the government's tourism

promotion policies, new airline (both premium and low-cost) routes,

increasing flight volume, and the upcoming AEC liberalization, more

foreigners are likely to visit Thailand. Foreign tourist volume is expected to

grow by 13%yoy to 28 million in 2015.

- Top picks: ERW, CENTEL

Thanks to blissful tourism, earnings of three hotel companies under our

coverage (MINT, CENTEL, and ERW) are projected to grow significantly in

4Q14 and 1Q15. Our recommendation for this sector is NEUTRAL. Top picks

are CENTEL([email protected]) and ERW([email protected]) for 44% and 26% upsides,

respectively. Their earnings are anticipated to grow best; ERW is projected

to revive remarkably and generate profit and CENTEL's earnings are

expected to grow by 20%yoy. In addition, thanks to the oil price plunge, air

and land transportation fares may be lowered, thus having positive

sentiment on the tourism sector.