• Expect 2Q18F profit to grow 5% yoy to Bt773m led by hotel business; margin should be pressured by negative SSSG
• Interest expense for NHH acquisition should be offset by share of income from NHH; to receive dividend in 2Q18
• OUTPERFORM, with lower DCF-based TP of Bt43/sh (from Bt47/sh) implying 34x FY18F P/E

Expect revenue to grow 9% yoy in 2Q18F

We expect earnings to recover in 2Q18 after falling 11% yoy in 1Q18, and growth should be stronger than peers (CENTEL and ERW). Owned-hotels RevPar should grow 5% yoy led by double-digit growth in Portugal hotels, while that for Thai hotels should also grow 5% yoy driven by strong operations at Bangkok hotels. RevPar from Maldives hotels should grow 10% yoy in USD but only 2-3% when translated to THB due to a stronger baht. Revenue from real estate business should deliver yoy growth (after tumbling 37% yoy in 1Q18) led by AVC business. For F&B, SSSG should remain negative for Thai and China hubs but TSSG should be positive for both. Overall, MINT’s revenue should grow 9% yoy driven by hotel & mixed-use business. EBITDA margin should be relatively flat yoy at 17% due to pressure from forex translation effect and operating loss from Corbin & King. We estimate core profit to grow 5% yoy to Bt773m in 2Q18F.

Raising stake in NHH to 38% and will tender offer after EGM

MINT currently owns 29.8% stake (117m shares) in NH Hotel Group (NHH) which they started to recognize in financial statements in June. At this stage, MINT has not confirmed the accounting method - dividend or equity income – it will adopt. In this report, we assumed equity method and expect share of income from NHH to offset interest expense incurred for this deal in 2Q18. If MINT adopts dividend income accounting, they would book EUR11.7m dividend in 2Q18 (actual payment in July). MINT’s earnings would lift to Bt1.1bn in 2Q18F. MINT will hold an EGM on 9 August for shareholders’ approval to buy additional 8.4% stake in NHH to take the total stake to 38.2% They will then tender offer the remaining shares. We expect NHH to lift MINT’s FY19F earnings by at least 6% (see our report dated 7 June).

Revised down earnings to reflect soft F&B operation

We revised down FY18-20F profit by 2-6% to reflect soft SSSG and margins in the F&B business and derived a new TP of Bt43/sh (from Bt47/sh). MINT is now trading at attractive 27x FY18F P/E vs regional peers’ average of 29x. Operations were weak in 1H18 but we expect earnings to improve in 2H18 led by recovering margins. The forex translation effect would be smaller as the THB has started to weaken. MINT also offers a well-diversified portfolio to weather a volatile market.