Bright Horizons: Navigating Tourism's Growth Revival
ASIAN HOTELS AND PROPERTIES PLC
AHPL.N0000
Current Price: LKR 61.00
Fair Value: LKR 86.00 (FY25E)
BUY
P/E 31 March
Estimates (LKR 'Mn)
Revenue
FY19
FY20
FY21
FY22
FY23
FY24E
FY25E
FY26E
7,658
5,560
1,790
EBIT
Net Profit
1,083
-28
-1,913
4,095
-407
93
8,417 14,980
2,996
19,129 23,130
4,208
6,014
811
-50
-1,781
-510
-278
1,577
2,536
3,681
1.8
(0.1)
(4.0)
(1.2)
(0.6)
3.6
5.7
8.3
-106% -3474%
71%
46%
668%
61%
45%
33.3x
N/A
N/A
N/A
N/A
17.1x
10.7x
7.3x
0.8x
0.8x
0.9x
0.9x
0.9x
0.9x
0.9x
0.8x
1.5
1.0
1.8
3.4
5.8
2.5%
1.6%
0.0%
0.0%
0.0%
2.9%
5.6%
9.5%
Dividend Payout
ROE
81.9%
2.5%
-888.6%
0.0%
0.0%
0.0%
50.0%
60.0%
70.0%
-0.2%
-5.7%
-1.6%
-1.0%
5.3%
8.3%
11.6%
Asian Hotels and Properties is a 78.6% owned subsidiary of premiere blue-chip John Keells
Holdings (JKH.N0000)
AHPL comprises of the city hotels segment with 847 rooms and owns two 5-star properties
under the flagship brand of (Cinnamon) and 56,988sq.ft shopping mall, Crescat Boulevard.
Top-line expanded by 33.0% YoY in 1QFY24 whilst earnings hampered by operating expenses
As tourist arrivals surged, AHPL witnessed a remarkable 33.0% YoY growth in its top-line,
reaching LKR 2.2Bn in 1QFY24. However, a corresponding 33.1% YoY increase in operating
expenses, totaling LKR 707.5Mn, negatively impacted profitability, resulting in a loss of LKR
247.9Mn. Meanwhile, despite a substantial 128.4% YoY rise in borrowings, the gradual
decrease in interest rates kept net finance costs stable at LKR 89.9Mn.
Anticipated tourism recovery and a revised Minimum Room Rate are expected to boost
AHPL's earnings
With the surge in arrivals, AHPL's occupancy rates spiked to an impressive 52% in FY23,
accompanied by a rise in Average Room Rates (ARR) due to the depreciation of the LKR. As
travel restrictions eased and consumer spending shifted from discretionary items to services,
coupled with strong banquet sales that reached pre-pandemic levels in 3QFY23, we anticipate
AHPL to reverse previous losses and project profitability of LKR 1,576.7Mn for FY24E and LKR
2,535.9Mn for FY25E. Having traded at an average PER multiple of 15.0x during the past 8Yr
period, we believe AHPL should re-iterate and trade at a historic average. Hence, we have
arrived at a FV of LKR 86.0 for FY25E. Thus, we rate the share BUY
Adjusted EPS (LKR)
YoY Growth (%)
Valuations
PER (x)
PBV (x)
DPS
DY (%)
PER based Valuation
Earnings (LKR 'Mn)
No. of Shares ('Mn)
EPS
Expected Average PER
Target Price
FY24E
FY25E
1,577
2,536
443
443
3.6
5.7
15.0x
15.0x
54
86
First Capital
A Janashakthi Group Company
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