'Worst over' for Minor stock

The stock was up 1.69 per cent yesterday at Bt12.

Tisco Securities rates it a "buy" given its hefty upside gain. However, the target price has been revised down to Bt15 from Bt17.

The broker, however, cut its 20082010 earnings forecast by 3 per cent to 5 per cent to between Bt1.94 billion and Bt3.07 billion to reflect the negative impact of the political chaos.

"The situation has not deterio¬rated further and we believe that panic selling of the stock could be over," the broker said in a note.

Hotel business contributed 47 per cent to the company's secondquarter net profit of Bt351 million, food 31 per cent, property 7 per cent and investment 1 per cent.

Based on other events that hurt tourism - May 1992 bloodshed, Sars, the tsunami, the last coup and the New Year's Eve bombings - Tisco Securities estimated Minor's share price would fall at most by between 15 per cent and 20 per cent, before recovering.

"As the stock is down 13 per cent already, we think it is close to bottom and a near-term rebound is possible," the broker said.

Recent hotelbooking cancellations represent a revenue loss of about Bt10 million but this would account for less than 1 per cent of total hotel revenues in the second quarter.

Siam City Research Institute recommended a "buy" for Minor, too, saying it carried the lowest risk among peers because of its diversified structure.

Minor has local and international hotels in prime locations.

The research house forecast tourists this month would decline from 1.05 million in the same period last year to below 1 million after the state of emergency was declared.

If political unrest did not end, it would cut its forecast for 2008 by between 3 per cent and 4 per cent to between 14.6 million and 14.7 million. That is flat compared with last year.