Bualuang Securities has upgraded its recommendation on Central Plaza Hotel Public Company Limited, or CENTEL, to buy from hold, and lifted it from being the least preferred hotel stock to the second top pick after AWC. The move follows a significant change in the earnings outlook, with profit forecasts for 2026 and 2027 raised by 13 percent and 15 percent respectively, and the target price raised to 48 baht from 34 baht, implying upside of around 25 percent. Five previously concerning negative factors are easing faster than expected: the impact of war on hotel businesses in Thailand, the Maldives, and Dubai; losses from new hotels in the Maldives; a reduction in average daily rate at Japanese hotels; the impact of renovation closures in Thailand; and the food business potentially facing pressure from purchasing power and costs. The Thai hotel business remains strong, with second-quarter 2026 revenue per available room growing 3 percent year-on-year, and expected to accelerate to 8 to 10 percent in the fourth quarter, driven by MICE events and large-scale activities. Dubai appears to have passed its trough, with revenue per available room, which had fallen over 60 percent in the second quarter, improving to around negative 30 percent, based on forward booking data for July that continues to improve. The Maldives is recovering faster than expected, with tourist arrivals improving from a 24 percent decline in April to a 1.5 percent decline in July. Losses are expected to narrow from 290 million baht in 2025 to 120 million baht in 2026, with a chance of breaking even in 2027. In Japan, although average daily rate remains pressured by a high base, it is not expected to be a continued drag on earnings after this year. The food business's same-store sales growth has stabilized, despite the economic slowdown and the impact of the Thai Chuay Thai Plus scheme, while branch expansion continues and margins remain strong. The research team therefore views CENTEL as transitioning from a stock with multiple downside risks to an earnings upgrade cycle and valuation rerating, while the share price still lags the hotel sector.
Central Plaza Hotel Public Company LimitedBualuang upgrades CENTEL to buy, raises target price and profit forecasts.
