Presentation to Moody’s Investorapp.pmgasia.com/InvestAsean2018/pdf/ASEAN Tourism... · ONYX Plans to open a new 406-room OZO Hotel with total investment of THB3.4b / Plans to open

Strictly Private & Confidential

ASEAN Tourism

- Invest ASEAN SG, 27-28 March 2018

Analyst

Sittichai Duangrattanachaya

(662) 658 1300 ext. 1393

[email protected]

Samuel Yin Shao Yang

(603) 2297 8916

[email protected]

Strictly Private & Confidential Page 1

The size of tourism industry in ASEAN

1) International tourist arrivals - % of total 2) % of whole economy GDP

3) % of whole economy employment4) % of contribution in ASEAN

10yr CAGR (2005-2016)

Northern EU 2.7%

Western EU 2.3%

Central/Eastern EU 2.6%

Southern/Medit EU 3.5%

North East Asia 5.5%

South East Asia 7.9%

Oceania 3.3%

South Asia 10.7%

North America 3.4%

Caribbean 2.7%

Central America 5.0%

South America 5.4%

Africa 4.7%

Middle East 4.3%

Source: UNWTO, WTTC, Respective countries


Tourist Arrival Breakdown

1) Top 10 tourist groups 2) Tourism contribution - ASEAN

3) Chinese contribution 4) Intra-ASEAN tourism

Source: UNWTO, WTTC, Respective countries


Overcrowding risk

Source: WTTC


T&T infrastructure scores and ranks

Source: World Economic Forum, WTTC, Oxford Economics

Note: Green signifies strong performance and red signifies weak performance


Travel and tourism investment

1) ASEAN T&T investment and demand 2) Share of T&T infrastructure spending

3) Global hotel transaction volumes 4) Composition of capital for hotel acquisition

Source: WTTC, JLL


Hotel room supply (as of Feb 2018)

Rooms under construction and planning Hotel supply development - % of supply

%Chg MoM %Chg YoY %Chg MoM %Chg YoY %Chg MoM %Chg YoY %Chg MoM %Chg YoY

China 0.5% 8.6% 8.7% 13.4% 6.5% 26.1% -6.5% 3.5%

Indonesia 0.4% 3.2% 6.5% -56.7% 4.2% -2.2% -6.4% -13.2%

Thailand 1.9% 8.9% 0.1% 42.5% 17.9% 43.7% -10.4% 8.6%

Malaysia 1.5% 4.3% -7.8% -19.8% 1.7% 11.2% -3.3% -17.8%

Singapore 0.0% 5.5% 0.0% 25.3% 0.0% -80.0% 0.0% -29.1%

Vietnam 4.5% 19.3% 31.4% 103.6% 17.5% 103.5% -4.7% -8.9%

Philippines 1.0% 14.8% 0.0% 61.6% 0.0% 20.5% -2.1% -3.3%

Japan 0.0% 3.5% 3.7% -0.8% 77.3% 96.9% -26.7% 24.9%

Australia 0.2% 6.9% 1.0% -2.9% 10.8% 30.0% -4.5% 58.1%

India 0.4% 4.4% 6.4% 14.9% 2.3% -15.2% -2.6% -4.0%

South Korea -0.2% 13.3% 1.6% 150.5% 10.1% -32.7% -6.7% -10.6%

Taiwan 0.0% 1.3% -15.7% -10.2% -6.3% -33.9% 6.4% 48.8%

New Zealand 0.0% 2.0% 0.0% -7.6% 21.3% 193.5% -1.2% 22.1%

Maldives 0.9% 10.7% 44.4% 156.6% -2.7% 77.0% 10.8% -22.6%

Existing supply Recently opened Under construction In planning

Source: CBRE, HVS, JLL, STR Global


SWOT for ASEAN as a destinationStrength Weakness

Steady tourism growth outlook Lack of a strong tourism cooperative

Intra-regional visa formalities Large disparity between destinations' level of quality

Short flight times for intra-regional travel Less attention to tourism yield and quality

Strong socio-economic development Duplication product offering and marketing campaigns

Good MICE facilities The one visia policy has still not been implemented

Diversified tourism experiences Poor infrastructure in some countries

Poor intra-country transport options

Insufficient human resource development

Opportunities Threats

Capitalizing on the emerging markets Safety and security issues

Higher interest in new destinations Political instability

Expansion of low cost carriers Currency fluctuations

Improved connectivity throughout ASEAN Overcrowding and insufficient skilled workers

Single source market dominance

Infrastructure, future investment and D/S balance

Source: Maybank Kim Eng, Respective countries


Thailand – Looking for sustainable growth


Analyst

Sittichai Duangrattanachaya | +662 658 5000 ext 1393| [email protected]


Thailand tourism outlook

1) Tourist arrival 2) Average daily spending by items

3) No -ve impacts from THB appreciation

- Tourist arrivals are expected to rise

further to reach 37-38m in 2018, boosted

by political stability and aggressive

marketing campaigns.

- Spending on shopping and F&B have been

rising in the past three years.

- We see limited impacts from THB

appreciation on both tourist traffics and

spending.

Source: Tourism Authority of Thailand, Ministry of Tourism and Sports


Tourist’s spending behavior (2013-2016)

1) ASEAN 2) Chinese

3) European 4) Indian

Source: Tourism Authority of Thailand, MKE-ISR


Government’s tourism policies and campaigns

1) Quality tourist 2) Secondary cities

3) Potential market 4) The Riviera Thailand project

Source: Tourism Authority of Thailand, Ministry of Tourism and Sports


Infrastructure development plan

- With >3 million tourists in the country every

month, safety and raising the standard of land

and sea transport was a priority.

- To boost tourism growth, Thailand would require

improvements to infrastructure to support 50m

tourists a year.

Source: Ministry of Transport, Royal Thai Government


Airport development plan

Source: Airports of Thailand, Civil Aviation Authority of Thailand

AOT's airport development plan 2017 2021 2022 2025 2026 2030

Phuket Airport

Capacity 6.5m -> 12.5m 12.5m -> 18m 18m -> 25m

Investment 5,790 2,700 12,000

Hat Yai Airport

Capacity 2.5m -> 6m 6m -> 10m

Investment 9,500 5,600

Chiang Mai Airport

Capacity 8m -> 18m 18m -> 20m

Investment 9,200 1,800

Chiang Rai Airport

Capacity 3m -> 3.3m 3.3m -> 3.7m 3.6m -> 4m

Investment 3,700 600 1,900

Suvarnabhumi Airport

Capacity 45m -> 90m 90m -> 105m 105m -> 120m

Investment 59,000 na na

Don Mueang Airport

Capacity 30m -> 40m

Investment 32,000

Total pax throughput capacity 92 137 155 197 212 246

Total investment 5,790 62,700 2,700 63,300 na 9,300

DOA's airport development plan

Regional airport development (Mae Sot / Bae Tong / Sakon Nakhon / Krabi) with total invesmtnet of THB7,260m

Develop Khon Kaen Passenger terminal - Total investment THB2,145m

Airports’ utilisation rate

Airports’ capacity expansion vs traffics


Secondary city airports’ traffic flow

South Northeast North Central & West

Feb-18 2M18 Feb-18 2M18 Feb-18 2M18 Feb-18 2M18

Chumphon 3.0% 1.4% Loei -5.8% -7.2% Mae Hong Sorn -5.5% -9.9% Phitsanulok 29.6% 30.6%

Ranong 53.5% 30.0% Udon Thani -4.1% -6.5% Lampang 4.7% 3.3% Tak (Mae Sot) 20.3% 21.8%

Surat Thani -2.7% -8.2% Nakhon Phanom 5.8% 5.8% Phrae 4.9% 5.1% Bangkok (Don Mueang) 9.5% 8.5%

Nakhon Si Thammarat -2.0% 11.0% Sakon Nakhon 4.0% 0.4% Nan -1.8% -2.8% Bangkok (Suvarnabhumi) 5.3% 4.7%

Krabi 1.8% -3.8% Khon Kaen 4.8% -3.4% Chiang Mai 9.1% 7.6%

Trang -7.6% -0.4% Roi Et 25.7% 21.6% Chiang Rai 15.4% 13.9%

Narathiwat -17.2% -25.1% Ubon Ratchathani 9.2% 7.3%

Phuket 22.8% 16.9% Buriram 34.2% 31.9%

Songkhla (Hat Yai) -2.1% -4.5%

Total 12.4% 8.0% Total 3.9% 0.5% Total 9.7% 8.2% Total 7.0% 6.2%

AOT's airports 18.3% 12.9% AOT's airports na na AOT's airports 10.3% 8.7% AOT's airports 6.9% 6.1%

DOA's airports -0.1% -2.9% DOA's airports 3.9% 0.5% DOA's airports 0.8% -0.6% DOA's airports 27.0% 28.3%

Under AOT management

%Chg YoY %Chg YoY %Chg YoY%Chg YoY

Under DOA management

Source: Airports of Thailand, Civil Aviation Authority of Thailand


Hotel projects in pipeline for FY18-20Operators Details Rooms Targeting destinations Opening timeline

Carlton Hotel Bought 2.5 rai of land with the unfinished hotel structure that has a valid construction permit 342 Bangkok 2019

ONYX Plans to open a new 406-room OZO Hotel with total investment of THB3.4b / Plans to open 255-rooms OZO 661 Pattaya, Phuket 2019

Marriott Plans to open 17 hotels in Thailand through various brands, mostly in luxury segment na Thailand 2018-2021

Cachet JV with local partners to develop or operate more than 40 properties including 463-rooms in Bangkok 463 Thailand 2019

Movenpick Plans to operate four hotels include Movenpick Asara Hua Hin (96 rooms), Movenpick Khao Yai (62 rooms), Phuke, Pattaya 358 Thailand 2018-2019

Expect to achieve deals for five hotels in Bangkok, Chiang Mai and Pattaya na Thailand 2019

Holiday Inn Plans to spend THB3b expanding its hospitality business in Eastern region, Rayong in particular 300 Thailand 2019

Best Western Plans to open a 270-room hotel at Bangkok's Don Mueang International Airport 270 Bangkok 4Q2019

Aiming to open at least 16 hotels in Thailand by 2020 / Signed management contracts for eight hotels (1,566 rooms) 270 Thailand 2018-2020

- Vib Sanampao (89 rooms) 89 Bangkok 3Q 2018

- Best Western Plus Beach Front (216 rooms) 216 Phuket 3Q 2018

- Best Western Prime Square (48 rooms) 48 Chiang Mai 1Q 2019

- Best Western Premier Bayphere (174 rooms) 174 Pattaya 2019

- Best Western Chatuchak (168 rooms) 168 Bangkok 1Q 2020

- BluPhere Pattaya, BW Premier Collection (199 rooms) 199 Pattaya 1Q 2020

- Best Western Premier Himalai (402 rooms) 402 Phuket 4Q 2020

Hyatt Scheduled to open 273-rooms hotel / Eyeing Rayong, Pattaya and Koh Samui for its next locations 273 Bangkok 3Q 2018

Miners Hospitality Devloping the Rizin Hotel and Residence Pattaya 160 Pattaya 2018

Travelodge Planning for 50 properties or 10,000 rooms in Thailand na Thailand 2020

Prince Plans to make inroads into Thailand by managing hotel in Prechuap Khiri Khan 255 Thailand 2020

Hilton Plans to introduce a new brand ' Hilton Garden Inn' to Thailand at Phuket (177 rooms) 177 Phuket 2020

Plans to open Waldorf Astoria Bangkok (170 rooms) and second DoubleTree in Phloenchit area (251 rooms) 421 Bangkok 2H18

Dusit Invested THB1.4b to develop hotel in Philippines under "D2" / Room could quadruple to >2,000 rooms in 3-years 1,500 Philippines 2H18

CENTEL Plans to open two COSI hotels in 2018-2019 / Set to open one hotel in Dubai (600 rooms) and two hotels in Maldives (300 rooms) 1,182 Thailand, Maldives, Dubai 2019-2020

Signed a management agreement to operate 12 hotels in many contries (857 rooms in Thailand) 2,698 Asia, Middle East 2018-2020

MINT Set an investment of THB3.4b to develop six hotels in Thailand and overseas (India, Vietnam, Malaysia, Indonesia, Tanzania) 9,847 Global 2020

ERW Plans to open six hotels in Thailans (4 Hop Inn, ibis, Novotel) and three Hop Inn hotels in Philippines 1,157 Thailand and Philippines 2018

Plans to open Mercure & ibis Sukhumvit 24, Hop Inn in Thailand and Philippines 1,515 Thailand and Philippines 2019-2020

SHRREIT Plans to raise THB8.05b to invest in five foreign five-stars hotels (946 rooms) in Vietnam, Cambodia and Indonesia 946 ASEAN 2018

Apex Plans to spend THB6.25b to develop three hotesl in Phuket (333 rooms) and one hotel in Pattaya (246 rooms) 579 Thailand 2019-2020

Approved a four-year investment plan worth THB23b to develop hotel and mixed use in Phuket and Krabi (THB3.8b) na Phuket, Krabi 2018-2021

Urban Plans to build a new city hotel worth THB400m in Bangkok's prime Sukhumvit area (120 rooms) 120 Bangkok mid-2019

Plans to build a new hotel worth THB1b on Chao Phraya River (250 rooms) / Eyeing three projects in Bangkok 250 Bangkok 2H19

UGH Set to open a mid-scale hotel worth THB500m in Bangkok's Silom (150 rooms) 150 Bangkok 3Q 2019

Plaza Athenee Rebranding and upgrading to a higher position as The Athenee Hotel, "a Luxury Collection Hotel" with total investment of THB1b na Bangkok 2018

Singha Set budget THB51b on a project in the Maldives consisting of hotels, duty-free shops, convention hall na Maldives 2018-2022

Novotel Investing THB360m for a big renovation ar Novotel Suvarnabhumi na Bangkok 2019

Origin Property JV with InterContinential Hotels Group to develop three hotels with total investment of THB7.5b 900 Bangkok, Chonburi 2021

Sansiri Set to expand its Escape Hotel chain over the next 3-5 years, with two properties in Hua Hin and Khao Yai 500 Chiang Mai, Phuket, Pattaya 2020-2022

Grande Centre Point Plans to open at least one hotel per year, targeting major cities. In 2018, One hotel in Bangkok will be opended 450 Thailand 2018-2020

Sala Hospitality Second phase of Sala samui Chaweng is expected to be completed in early 2019 (83 rooms) 83 Soh Samui 2019

Absolute Hotel Services Signed a management agreement to open U North Pattaya in 2020 (270 rooms) 270 Pattaya 2020

Total rooms in Thailand 11,596


Demand and Supply dynamics in Thailand

1) OCC, ADR, Tourist arrivals 2) Existing supply and recently opened

3) Rooms in the pipeline 4) Conversion rate of room under construction

Source: CBRE, HVS, JLL, STR Global


Thailand tourism related companies – Peer valuation summary

Source: Maybank Kim Eng

Price TP Rating ROE (%) Price chg

22-Mar THB FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E YTD (%)

Aviation

Airports of Thailand 68.0 60.0 HOLD 38.2 34.6 6.6 6.0 14.9 13.7 22% 11% 1.3% 1.5% 18.1% 0%

Asia Aviation 5.35 5.7 HOLD 15.2 13.7 1.1 1.1 8.9 9.0 15% -5% 2.7% 2.6% 7.2% -13%

Bangkok Airways 14.7 27.0 BUY 54.9 36.6 1.0 1.0 12.6 10.9 na 50% 2.1% 2.5% 2.3% -15%

Thai Airways 15.8 12.0 SELL 15.0 10.8 1.0 1.0 7.0 6.8 321% 39% 0.7% 0.8% 7.8% -9%

Hotel

Central Plaza Hotel 47.0 60.0 BUY 27.1 24.1 4.8 4.2 13.5 12.4 8.8% 12.4% 1.5% 1.7% 18.3% -21%

Erawan Group 7.8 9.0 BUY 33.0 28.1 3.4 3.2 13.7 12.3 16.4% 17.4% 1.2% 1.4% 10.8% -11%

Minor International 37.8 45.0 HOLD 26.7 23.6 3.3 3.0 16.9 15.5 15.5% 13.3% 1.2% 1.4% 13.2% -14%

Healthcare

Bangkok Dusit 22.6 20.0 HOLD 38.5 34.5 5.2 4.9 23.3 21.2 14.5% 11.6% 1.4% 1.5% 13.9% 8%

Bumrungrad 207.0 230.0 BUY 36.9 34.0 8.1 7.2 22.8 20.8 23.3% 8.5% 1.4% 1.5% 24.2% 9%

Bangkok Chains 16.7 17.0 BUY 39.0 33.8 7.2 6.4 19.8 17.8 15.7% 15.3% 1.5% 1.6% 18.8% 2%

Siam Wellness 18.7 15.7 HOLD 40.9 30.6 11.9 9.5 25.8 20.0 48.5% 33.4% 1.0% 1.4% 30.3% -9%

Beauty Community 21.6 24.2 BUY 40.0 31.7 34.2 29.8 30.5 24.1 29.8% 25.9% 2.3% 2.9% 67.7% 2%

Platinum 8.4 8.7 HOLD 29.0 21.2 2.6 2.5 13.8 10.2 9.6% 36.6% 2.2% 2.9% 9.2% 3%

DDD 100 125 BUY 51.2 39.2 36.4 27.9 34.4 26.2 na 30.7% 1.3% 1.7% 42.9% 10%

Others* (Based on consensus estimates)

P/E (X) EPS growth (%) Dividend yield (%)P/B (X) EV/EBITDA (X)


Malaysia – Towards Visit Malaysia Year 2020


Analyst

Samuel Yin Shao Yang | +603 2297 8916 | [email protected]


Colours of Malaysia


Tourism industry a major contributor to the Malaysian economy

Gross Value Added Of Tourism Industry (GVATI) Total visitor arrivals to MY (‘000)

Breakdown of tourist spending (% share of GVATI) Tourism receipts earned in MY (MYRb)

25,948

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Source: Department Of Statistics, Tourism Malaysia


2017 was a year of consolidation after a resurgent 2016

Total visitor arrivals to MY – eased in 2H17 SG visitor arrivals to MY – weighed by recovering MYR

CN visitor arrivals to MY- weighed by regional competition 2017 total visitor arrivals to MY breakdown by nationality

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

-

500.0

1,000.0

1,500.0

2,000.0

2,500.0

3,000.0

Jan-1

0

Jun-1

0

Nov-1

0

Apr-

11

Sep-1

1

Feb-1

2

Jul-

12

Dec-1

2

May-1

3

Oct-

13

Mar-

14

Aug-1

4

Jan-1

5

Jun-1

5

Nov-1

5

Apr-

16

Sep-1

6

Feb-1

7

Jul-

17

Dec-1

7

Total visitor arrivals ('000) Total visitor arrivals chg YoY

-40.0%

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

-

50.0

100.0

150.0

200.0

250.0

Jan-1

0

Jun-1

0

Nov-1

0

Apr-

11

Sep-1

1

Feb-1

2

Jul-

12

Dec-1

2

May-1

3

Oct-

13

Mar-

14

Aug-1

4

Jan-1

5

Jun-1

5

Nov-1

5

Apr-

16

Sep-1

6

Feb-1

7

Jul-

17

Dec-1

7

Chinese visitor arrivals ('000) Chinese visitor arrivals chg YoY

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

-

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1,400.0

1,600.0

1,800.0

Jan-1

0

Jun-1

0

Nov-1

0

Apr-

11

Sep-1

1

Feb-1

2

Jul-

12

Dec-1

2

May-1

3

Oct-

13

Mar-

14

Aug-1

4

Jan-1

5

Jun-1

5

Nov-1

5

Apr-

16

Sep-1

6

Feb-1

7

Jul-

17

Dec-1

7

Singapore visitor arrivals ('000) Singapore visitor arrivals chg YoY

Singapore48%

Indonesia11%

China9%

Brunei6%

Thailand7%

Japan2%

United Kingdom1%

Others16%

Source: Tourism Malaysia

2017: -3%2017: -6%

2017: +7%


Tourism receipts still flat and on-the-ground spending still growing strongly

Tourism receipts earned in MY (MYRb) – still flat YoY Foreign credit card purchases in MY chg YoY – still strong

Average tourism receipts by nationality (MYR) Malaysia My Second Home participants – More CN migrants

Country 2013 2014 2015 2016 8M17 Total

China 1,337 1,307 719 1,512 1,439 9,902

Japan 739 428 300 281 179 4,372

Bangladesh 285 250 205 283 253 3,746

United Kingdom 148 117 83 110 113 2,499

Iran 51 17 19 8 18 1,351

Singapore 145 94 67 93 60 1,346

Taiwan 151 83 71 77 80 1,271

Korea 98 137 120 184 278 1,514

Pakistan 58 51 31 29 25 992

India 41 42 46 68 53 937

Others 622 548 550 702 586 7,891

Total 3,675 3,074 2,211 3,347 3,084 35,821

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2,970 3,033

3,968

2,249 2,262

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Singapore Indonesia China Brunei Thailand

-30.0

-20.0

-10.0

0.0

10.0

20.0

30.0

40.0

Dec-1

3

Feb-1

4

Apr-

14

Jun-1

4

Aug-1

4

Oct-

14

Dec-1

4

Feb-1

5

Apr-

15

Jun-1

5

Aug-1

5

Oct-

15

Dec-1

5

Feb-1

6

Apr-

16

Jun-1

6

Aug-1

6

Oct-

16

Dec-1

6

Feb-1

7

Apr-

17

Jun-1

7

Aug-1

7

Oct-

17

Dec-1

7

UnionPay &

AliPay not

included

Source: Tourism Malaysia, Bank Negara Malaysia, Ministry of Tourism & Culture

CN visitors spend

more than a third

more than others


0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

2010 2011 2012 2013 2014 2015 2016

Domestic (m) (LHS) Foreign (m) (LHS) Foreign as % of total (RHS)

45% of CN

visitors to

MY visit

Melaka

Sabah and Melaka are the shining stars

Total visitor arrivals to Sabah – still growing YoY CN visitor arrivals to Sabah – drawn by nature

Visitor arrivals to & tourism receipts in Melaka – still up YoY Total visitor arrivals to Melaka breakdown – increasingly foreign

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

Jan-1

3

Apr-

13

Jul-

13

Oct-

13

Jan-1

4

Apr-

14

Jul-

14

Oct-

14

Jan-1

5

Apr-

15

Jul-

15

Oct-

15

Jan-1

6

Apr-

16

Jul-

16

Oct-

16

Jan-1

7

Apr-

17

Jul-

17

Oct-

17

Jan-1

8

Malaysia (LHS) International (LHS) Total chg YoY (RHS)

-80.0%

-60.0%

-40.0%

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

140.0%

-

10,000

20,000

30,000

40,000

50,000

60,000

Jan-1

3

Apr-

13

Jul-

13

Oct-

13

Jan-1

4

Apr-

14

Jul-

14

Oct-

14

Jan-1

5

Apr-

15

Jul-

15

Oct-

15

Jan-1

6

Apr-

16

Jul-

16

Oct-

16

Jan-1

7

Apr-

17

Jul-

17

Oct-

17

Jan-1

8

China (LHS) China chg YoY (RHS)

2017: +15%

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Tourist arrivals (m) (LHS) Tourism receipts (m) (RHS)

20% of CN

visitors to

MY visit

Sabah

25% of all

visitors to

MY visit

Melaka

Source: Sabah Tourism Board, Melaka Tourism Promotion Division

2017 visitor arrivals: +3%

2017 local: +7%

2017 foreign: +9%


Optimistic about Visit Malaysia Year 2020

History is on the side of optimism

• 2017 total visitor arrivals (-3% YoY) was weighed down

by:-

Recovering MYR against other ASEAN currencies,

especially the SGD

Regional competition from other ASEAN countries,

especially TH, SG and ID

Less promotion and development (P&D) budget due

to low oil prices

• VMY 2014 P&D budget was MYR358m. VMY 2020 P&D

budget is MYR500m and may get another MYR300m.

• Historically, total visitor arrivals and tourism receipts

ramp up BEFORE VMY (i.e. 2006 and 2013).

• Judging from history, 2019 and 2020 ought to be positive

for the tourism industry.

• Historically, total visitor arrivals and tourism receipts

structurally upgrade AFTER VMY.

• Key attractions that are expected to be completed soon

are:-

Encore Melaka - Impression Series (2Q18/3Q18) –

first outside China

20th Century Fox World (4Q18/1Q19) – first Fox

theme park in the world

• Expect inter-state rivalry as state governments will

receive half of tourism tax (MYR10 per night).

Total visitor arrivals to MY (‘000)

Tourism receipts earned in MY (MYRb)

-

5,000

10,000

15,000

20,000

25,000

30,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

36m visitor arrivals & MYR168b tourism receipts

Source: Tourism Malaysia

2006: +7%, 2007: +20%

2013: +3%, 2014: +7%

2006: +14%, 2007: +27%

2013: +8%, 2014: +10%


Rapid infrastructure development to drive tourism industry growth

Bukit Kayu Hitam CIQ

- 300km railway line

- Songkhla-Penang

Swettenham Pier Cruise Terminal

- Penang Port-Royal Carribean JV

- 480m to 700m berth expansion

Encore Melaka (2Q18)

- Impression Series from China

- 2,007 rotating seats theatre

East Coast Rail Link (2024)

- >22 stations along >600km

- Port Klang to Thai border

KL-SG High Speed Rail (2026)

- 8 stations along 350km

- 1 station in Melaka

20th Century Fox World (4Q18)

- First in the world

- 25 rides over 25 acres

Tok

Bali

3-4m

visitors

p.a.

3m tickets

sold pre-

opening

2017:

438k pax

up 140%

KL-SG in

90

minutes

772 acres

develop-

able

Source: The Sun Daily, The Independent, Penang Port, Yong Tai, Genting Malaysia, Land Public Transport Commission, MyHSR Corporation


Malaysian tourism related companies – Peer valuation summary

CP TP Rating EPS (sen) P/E (X) EPS growth (%) Dividend yield (%) P/BV (x) Price chg

16 Mar MYR CY18E CY19E CY18E CY19E CY18E CY19E CY18E CY18E CY18E YTD (%)

Aviation

AirAsia 4.15 3.81 Hold 38.0 39.8 10.9 10.4 (10.4) 4.7 2.2 17.3 1.9 23.9

AirAsia X 0.41 0.39 Hold 3.2 4.8 12.8 8.5 52.4 50.0 0.0 11.8 1.5 24.2

MAHB 8.85 8.11 Sell 26.3 30.6 33.7 28.9 182.8 16.3 1.0 4.7 1.6 0.7

Gaming

Genting 8.95 12.75 Buy 56.2 68.5 15.9 13.1 1.4 21.9 2.0 7.0 0.9 (2.7)

Genting Malaysia 5.24 5.35 Hold 32.6 43.7 16.1 12.0 31.5 34.0 2.3 9.1 1.4 (6.9)

Others

Atlan 4.48 6.00 Buy 16.0 16.5 28.0 27.1 3.2 3.1 3.8 12.5 3.5 4.4

Yong Tai 1.50 1.75 Buy 10.9 18.8 13.8 8.0 153.5 72.0 0.0 12.5 1.1 (1.3)

REITs

Al-Salam 0.91 1.00 Hold 6.2 6.3 14.6 14.4 1.6 1.6 5.9 5.8 0.8 (9.5)

CMMT 1.00 1.15 Buy 7.5 7.5 13.3 13.3 (3.8) 0.0 7.1 5.7 0.8 (45.4)

IGB 1.50 1.85 Buy 8.7 9.0 17.2 16.7 0.0 3.4 5.9 8.2 1.4 (16.7)

KLCC Property 7.60 8.00 Hold 40.6 41.8 18.7 18.2 1.8 3.0 4.4 5.4 1.0 (12.0)

Pavilion 1.40 1.60 Hold 7.6 8.3 18.4 16.9 (1.3) 9.2 5.3 5.7 1.1 (13.0)

Sunway 1.67 1.85 Buy 10.0 10.4 16.7 16.1 4.7 3.5 5.4 7.1 1.2 (12.1)

YTL Hospitality 1.10 1.40 Buy 8.3 9.0 13.3 12.3 5.1 8.5 6.9 5.7 0.8 (14.1)

Source: Maybank Kim Eng


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