KGI Rates “Hotel” Stocks “Overweight” on Shorter Quarantine, Raising SPA-MINT as Top Pick

As a period of mandatory quarantine likely to be shorter from 14 days to 7/10 days, KGI Securities (KGI) believes hotels should be on track to see strong recovery momentum in 2H21, maintaining a full-year target for tourist arrivals at 8 million in 2021 and reiterating a rating of Overweight on Thailand’s hotel sector, which have SPA and MINT as Top Pick.

 

Thailand’s Centre for COVID-19 Situation Administration (CCSA) is discussing over the possible shortened quarantine times for foreign visitors from 14 days to 7 days for vaccinated people and 10 days for unvaccinated travelers. 

 

Overall, KGI foresees a meaningful recovery in 2H21, backed by i) Thailand’s willingness to re-open the country, ii) global vaccinations, and iii) Thai government’s target to vaccinate 50% of the population by the end of 2021 with high-risk groups like people in the tourism sector possibly being priority for vaccinations. 

 

Therefore, KGI maintains an Overweight rating on Thailand’s hotel sector due to a confidence in the long-term view backed by global vaccinations, easing restrictions, and an improving COVID)19 situations. The top-buys are still Siam Wellness Group Public Company Limited (SPA) with a target price of ฿9.50/share and Minor International Public Company Limited (MINT) with a target price of ฿38.0/share.