ERW-BA-NOK to Benefit the Most from the ฿22.4Bn Domestic-Tourism Stimulus

SCB Securities (SCBS) stated in its analysis that hotel stocks with higher revenue contributions from Thai guests and aviation operators with high contributions from the domestic market would be the most beneficial from the 22.4 billion baht tourism stimulus package.

 

The Thai Cabinet on Tuesday has approved a 22.4 billion baht tourism stimulus package, which includes 18 billion baht on “Rao Pai Tiew Kan (We Go Travel Together)” project, 2.4 billion baht on “Kam Lang Jai (Encouraging)” project and 2 billion bath on “Tiew Pun SuK (Travel to Share Happiness)”.

The stimulus aid will offer exclusively for medical personnel and health volunteers as well as the general public to travel in the country during July – October, 2020.

 

SCBS stated that among hoteliers, Erawan Group Public Company Limited (ERW) should benefit the most due to its largest revenue contribution from Thai guests around 18%, three times higher than the second beneficiary like CENTEL with 6% contribution from Thai guests.

For aviation operators, Bangkok Airways Public Company Limited (BA) and Nok Airlines Public Company Limited (NOK) have higher passenger revenue contribution from domestic routes at 72% and 50%, respectively. Meanwhile, Asia Aviation Public Company Limited (AAV) and Thai Airways International Public Company Limited (THAI) have 35% and 10%, respectively.

Nevertheless, SCBS cautioned investors for the longer-term investment period on airline stocks from high earnings volatility.

 

As of 16:03 local time in Thailand (GMT+7), ERW rose ฿0.16/share or 4.15% to ฿4.02/share. BA increased ฿0.35/share or 5.07% to ฿7.25/share. Meanwhile, NOK was flat at ฿1.17/share.