CGS International maintains a buy rating on S Hotels and Resorts Public Company Limited, or SHR, but has lowered its target price to 2.50 baht from 3.00 baht, after cutting its normalized earnings per share estimates for 2026 through 2028 by 10.9 to 38.1 percent to reflect the impact of weaker-than-expected hotel operations in the Maldives. The firm expects SHR to post a normalized operating loss of 77 million baht in the second quarter of 2026, compared with a normalized profit of 24 million baht in the same period last year and 259 million baht in the previous quarter, as hotel revenue is forecast to decline to 2.3 billion baht, down 4 percent year-on-year and 12 percent quarter-on-quarter. The main drag comes from the Middle East conflict, which has reduced international tourist arrivals in the Maldives, and higher oil prices pushing up utility costs. Revenue per available room at the Maldives hotels is expected to drop 12 percent year-on-year in the second quarter of 2026, while utility costs are set to rise by around 35 to 40 million baht after diesel prices increased roughly 45 percent year-on-year. The research team sees earnings recovering in the second half of 2026 as the UK travel season kicks in, and expects the Maldives business to gradually improve if the Middle East situation eases. In addition, the planned sale of the investment in Jupiter Hotels Limited, which operates 15 hotels in the United Kingdom, may be delayed until late 2026 from the original plan announced in February 2026. Once the transaction is completed, it is expected to boost SHR's net profit by about 50 to 100 million baht per year as the company will no longer have to recognize losses from Jupiter Hotels Limited. Under its latest estimates, CGS International projects SHR will post revenue of 10.101 billion baht and a normalized profit of 387 million baht in 2026, before rising to 581 million baht and 744 million baht in 2027 and 2028 respectively.
S Hotels and Resorts Public Company LimitedMiddle East conflict reduces tourist arrivals in the Maldives, hurting SHR's hotel revenue and earnings.