Minor International

4Q12 net profit and norm profit projected to grow 74% and 16% YoY respectively HOLD

Minor International Plc (MINT)

Q4 2012 net profit and norm profit projected to grow 74% and 16% YoY respectively

MINT's 4Q12 net profit is projected to stand at B820m or 74% YoY growth

due to B237.8m recognized from the provision of impairment asset. If the

extraordinary item isn't included, the normalized profit would grow by 16%

YoY because of the growth in every main business. According to seasonal

benefits, the hotel business' average occupancy rate has been boosted by

71percent from 68% in 4Q11 while the average revenue per available room

(RevPar) has increased to 9% YoY. For the property development business,

B800m of revenue is projected to be recognized from transfer of St. Regis

with 6% of area worth of B300m and the revenue from Timeshare business

would be recognized by B500m. For food business, the same-store sales

growth is projected at 4.6% YoY. Combined with openings of new restaurants

by 124 branches in 4Q11 (or 77 branches in 3Q12) to 1,381 branches, the

total system sales would grow by 11.4% YoY. Accordingly, 4Q12 norm profit

margin would be driven to 8.5%. In terms of FY2012 norm profit, it is

projected to stand at B2.96bn or 43% YoY increase.

Every business to shine continuously… profit projected to grow 16% YoY

MINT's businesses tend to improve continuously in 2013 due to the following

factors. 1) The hotel business has recovered constantly. Moreover, there

would be a new hotel opened with own euity under a brand "Anantara"

Phuket hotel (77 rooms) in 2H13. Combined with 7 more hotels under the

company's management, the average occupancy rate of every hotel in 2013

would increase to 72% compared with 69% in 2012 while the average room

rate would rise by 7% YoY. 2) For the property development business, the

company would recognize more revenue from Timeshare business by

US$80m or B2.4bn (from B1.35bn in 2012) and the transfer of St. Regis

condominium (20% area left on sale and the other 5% is waiting be

transferred, worth of B1-1.3bn). 3) The food business has thrived by 4% on

the growth of same-store sales and branch expansion of 120 outlets. Lastly,

4) there is full-year revenue from Riverside restaurant after 49% of

acquisition has been made in late-December 2011 by B1.2bn. Preliminary,

B120m profit from the abovementioned businesses would boost 2013 norm

profit to B3.43bn, growing by 16% YoY.

"HOLD"… 2013 FV is B22.00

The fair value, using DCF-WACC 9.4%), in 2013 stands at B22.00 which is

close to the current share price. Accordingly, we reiterate our

recommendation of "HOLD" for MINT.