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Published on April 3, 2008

As part of the company's planned business expansion, the new investments comprise the purchase of common shares in Tanzania Tourism and Hospitality Investments, a holding company which owns 100 per cent of Elewana Afrika (Tanzania) and Zanzibar Tourism and Hospitality Investment, a holding company which owns 100 per cent of Elewana Afrika (Zanzibar). It would buy a 50-per-cent stake each in those overseas companies from Minerva Nominees through its wholly owned subsidiary Hospitality International.

 The purchase of the business came after Mint's announcement last week of a joint venture with Kempinski Hotels and Resorts to explore strategic development opportunities in Europe and Asia.

Bualuang Securities expected the company to announce another acquisition deal in the near future, probably a food brand. In addition, it is negotiating a hotel acquisition, meaning an upside to the research group's forecast and target price.

Due to expansion, brokerage houses expected upside gain in Mint's share prices. With strong hotel and resort expertise and experience in the Asian market under the Anantara brand, Mint was well positioned to seek out development opportunities on behalf of the Kempinski Group and offer technical service skills that matched Kempinski's growth strategy, according to Tisco Securities.

In turn, Kempinski's comprehensive network and experience especially in the Mediterranean basin should support Anantara's expansion. Mint should also earn more consulting fee if Kempinski expanded its network in Southeast Asia. Tisco Securities commented that the agreement with Kempinski would help Mint with the latest techniques in management of luxury hotels.

Tisco maintained the 2008 earnings forecast of Bt1.9 billion, up 22 per cent on year from Bt1.61 billion, but expected Mint share price to be Bt20, implying a 20 per cent upside. Yesterday, the Mint stock closed unchanged at  Bt17.50.

Bualuang Securities also said that the joint venture was a good strategic move, but with no mid-term impact as a feasibility study for a single project typically takes about six months before a decision on whether to invest is made.

The brokerage house expects Mint's improved earnings will be posted for the first quarter of 2008 due to a low base comparison, with the fallout from the New Year's Eve bombing in December 2006, a recovery in the food business, the start of equity income contributions from Coffee Club and residential income from The Estate Samui.

The house maintained target price at Bt19.20 each, on concerns that Mint's food business in China and internationally will perform poorly.

UBS Securities (Thailand) was the most bullish, with the target price of Bt23.  Backing up the optimism is the faster expansion of Ananta due to the joint venture. The existing joint venture deals with Marriott and Kempinski could lead to the announcements of new hotel-development projects, which could drive the earnings and share price further.

Mint's board has approved debenture capacity of Bt15 billion for future expansion. Management has also indicated the potential acquisition of a new restaurant brand this year.

Sasithorn Ongdee

The Nation