Bright Horizons: Navigating Tourism's Growth Revival
AITKEN SPENCE HOTEL HOLDINGS PLC
AHUN.N0000
Current Price: LKR 79.60
AHUN is a 74.5% owned subsidiary of Aitken Spence (SPEN.N0000)
It is the largest room key operator in the country with operations in Sri Lanka (1,295rooms
in 8 properties & 116 rooms in 1 managed properties), Maldives (735 rooms in 5
properties), Oman (150 rooms in 1 owned property and 191 rooms in 2 managed
properties) and India (140 rooms in 1 owned property).
AHUN records a higher loss of LKR 2.2Bn in 1QFY24 compared to LKR 0.9Bn in 1QFY23
Despite the gradual recovery in both Sri Lankan and South Asian and Middle East
segments, AHUN reported a net loss of LKR 2.2Bn in 1QFY24 amidst the significant rise in
the net operating cost recording at LKR 7.3BBn in 1QFY24. Accordingly, operating profits
turned into losses and fell by 98.3% YoY to LKR 589.4Mn during the quarter compared to
1QFY23. In the midst of high interest rate environment, net finance cost of AHUN
witnessed a steep rise of 29.9% YoY to LKR 1.3Bn which hampered the profit growth of
AHUN.
Relatively faster recovery in South Asian and Middle East Sector to aid AHUN in
outperforming peers
Generating over 85.5% of revenue from outside Sri Lanka, AHUN is expected to benefit
from relatively faster recovery in tourism in peer countries. Taking in to consideration the
expected economic recovery and the looming tourists arrivals along with the global
economic recovery, we anticipate earnings to soar for FY24 at 1.7Bn and for FY25 at LKR
2.4Bn respectively. BUY
Fair Value: LKR 105.00 (FY25E)
BUY
P/E 31 March
Estimates (LKR 'Mn)
Revenue
FY19
FY20
FY21
FY22
FY23
FY24E
FY25E
FY26E
EBIT
Net Profit
19,055
2,735
811
18,588 5,592
1,564 -5,189
-625 -4,669
24,571
4,280
624
1,685
45,060 51,098 58,944 71,662
7,311 8,527 8,646 12,614
-288
2,360
4,567
Adjusted EPS (LKR)
YoY Growth (%)
2.4
(1.9)
(13.9)
1.9
(0.9)
5.0
7.0
13.6
-180%
-632%
113%
146%
685%
40%
93%
Valuations
PER (x)
PBV (x)
DPS
33.6x
N/A
N/A
42.9x
N/A
15.9x
11.3x
5.9x
1.3x
1.3x
1.7x
1.3x
1.3x
1.2x
1.1x
1.0x
1.0
1.0
2.5
5.4
1.3%
0.0%
0.0%
0.0%
0.0%
1.3%
3.1%
6.8%
Dividend Payout
42.3%
0.0%
0.0%
0.0%
0.0%
20.0%
35.0%
3.7%
-3.1%
-29.4%
3.1%
-1.4%
7.5%
9.9%
40.0%
17.1%
DY (%)
ROE
PER based Valuation
Earnings (LKR 'Mn)
No. of Shares ('Mn)
FY24E
FY25E
1,685
2,360
336
336
EPS
5.0
7.0
Expected Average PER
16.0x
15.0x
Target Price
80
105
First Capital
A Janashakthi Group Company
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