RESULTS

February 28, 2023

Central Plaza Hotel

CENTEL TB / CENTEL.BK

Sector: Tourism OVERWEIGHT

Rating: BUY
4Q22 results beat all estimates Target Price: Bt60.00
Price (February 27, 2023): Bt55.75

4Q22 results beat our estimate and the street’s Key statistics
Market cap Bt75.3bn USD2.2bn
CENTEL reported a 4Q22 core profit of Bt382m (excluding FX gain of 12-mth price range Bt33.5/Bt56.5
Bt116m), against core profits of Bt152m for 4Q21 and Bt27m for 3Q22. 12-mth avg daily volume Bt194m USD5.6m
The result was considerably above our estimate of a Bt240m profit and # of shares (m) 1,350
Est. free float (%) 72.0
the consensus’ projection of a Bt260m profit.
Foreign limit (%) 40.0
Result highlights Share price perf. (%) 1M 3M 12M
CENTEL’s hotel revenue improved substantially by 109% YoY—the Relative to SET 10.4 13.7 65.0
Absolute 7.2 14.4 61.6
occupancy rate and average daily room rate were both much higher than
expected in 4Q22. The hotel business 4Q22 core earnings were Bt359m Financial summary
(against a loss of Bt31m for 4Q21 and a profit Bt321m for 4Q19). FY Ended 31 Dec 2022 2023E 2024E 2025E
Revenues (Btm) 17,502 22,253 24,412 28,370
QSR revenue increased 17% YoY. The growth was led by 12% SSSG Net profit (Btm) 398 1,762 2,250 2,728
and outlet expansion. The QSR business 4Q22 net profit was Bt139m EPS (Bt) 0.29 1.31 1.67 2.02
EPS growth (%) n.m. n.m. +27.7% +21.2%
(against a profit of Bt183m for 4Q21 and a profit of Bt150m for 4Q19). Core profit (Btm) 387 1,762 2,250 2,728
CENTEL’s QSR business was negatively impacted by rising food costs Core EPS (Bt) 0.29 1.31 1.67 2.02
Core EPS growth (%) n.m. n.m. +27.7% +21.2%
and SG&A expenses in 4Q22. PER (x) 146.2 42.7 33.4 27.6
PBV (x) 3.1 3.8 3.5 3.3
Outlook Dividend (Bt) 0.0 0.5 0.7 0.8
Dividend yield (%) 0.0 0.9 1.2 1.4
We expect CENTEL’s hotel business to continue to revive in 1Q23, ROE (%) 2.2 9.2 11.1 12.5
supported by Thailand-located hotels. The QSR operation should achieve
CG / CAC Anti-Corruption Certification
earnings growth, supported by a consumption recovery. Hence, we
expect YoY and QoQ profit growth for 1Q23. Yes
/
What’s changed?
Our 2023 earnings forecast remains unchanged.

Recommendation
We like CENTEL for its solid fundamentals, strong balance sheet, hotel
business turnaround story, and profitable QSR operation. BUY!

Kalvalee Thongsomaung
Securities Fundamental Investment Analyst
[email protected]
+66 2 618 1341

Please see final page for additional important disclosures. Bualuang Securities Public Company
See disclaimer at the end of report Limited (“BLS”) is a foreign broker-dealer unregistered in the USA. BLS research is prepared by
research analysts who are not registered in the USA. BLS research is distributed in the USA
pursuant to Rule 15a-6 of the Securities Exchange Act of 1934.
 | RESEARCH

CENTEL: Financial Tables – Year

PROFIT & LOSS (Btm) 2021 2022 2023E 2024E 2025E
Revenue growth and asset turnover
Revenue 11,211 17,502 22,253 24,412 28,370
Cost of sales and services (7,613) (10,494) (13,035) (14,247) (16,667) % Revenue growth (%) (LHS) x
Gross profit 3,598 7,008 9,218 10,164 11,703 Asset turnover (x) (RHS)
SG&A (5,075) (6,295) (7,032) (7,494) (8,653) 80 1.0
EBIT (1,477) 713 2,186 2,670 3,050 60 0.8
Interest expense (718) (726) (626) (597) (543) 40
Other income/exp. 424 598 474 516 559 20 0.6
EBT (1,771) 585 2,034 2,589 3,065 0 0.4
Corporate tax 78 (138) (386) (492) (582) (20)
After-tax net profit (loss) (1,693) 447 1,647 2,097 2,483 (40) 0.2
Minority interest 24 (16) 48 53 61 (60) 0.0
Equity earnings from affiliates (64) (44) 67 101 184 19 20 21 22 23E 24E 25E
Extra items 0 11 0 0 0
Net profit (loss) (1,733) 398 1,762 2,250 2,728 A/C receivable & A/C payable days
Reported EPS (1.28) 0.29 1.31 1.67 2.02
Fully diluted EPS (1.28) 0.29 1.31 1.67 2.02 AR / Sales (days)
Core net profit (1,733) 387 1,762 2,250 2,728 AP / Cost of Goods (days)
140
Core EPS (1.28) 0.29 1.31 1.67 2.02
120
EBITDA 1,690 3,846 6,161 6,933 7,575
100
KEY RATIOS 80
Revenue growth (%) (13.1) 56.1 27.1 9.7 16.2
60
Gross margin (%) 32.1 40.0 41.4 41.6 41.3
15.1 22.0 27.7 28.4 26.7 40
EBITDA margin (%)
(13.2) 4.1 9.8 10.9 10.8 20
Operating margin (%)
Net margin (%) (15.5) 2.3 7.9 9.2 9.6 0
Core profit margin (%) (15.5) 2.2 7.9 9.2 9.6 19 20 21 22 23E 24E 25E
ROA (%) (4.1) 0.8 3.5 4.2 4.9 Profit margins
ROCE (%) (6.2) 1.2 4.9 5.8 6.9
Asset turnover (x) 0.3 0.4 0.4 0.5 0.5 % Gross margin (%)
Current ratio (x) 0.6 0.6 0.6 0.6 0.6 EBIT margin (%)
0.8 0.8 0.9 0.9 0.7 50
Gearing ratio (x)
Interest coverage (x) n.m. 1.0 3.5 4.5 5.6 40
30
BALANCE SHEET (Btm) 20
Cash & Equivalent 3,855 3,791 3,500 3,000 2,500
10
Accounts receivable 801 1,227 1,591 1,745 2,028
748 1,024 1,280 1,399 1,637 0
Inventory
29,875 29,215 32,693 35,356 35,369 (10)
PP&E-net
13,313 12,909 13,877 13,892 13,847 (20)
Other assets
48,593 48,166 52,941 55,392 55,381 19 20 21 22 23E 24E 25E
Total assets
Accounts payable 2,669 3,460 4,570 4,995 5,844 Capital expenditure
ST debts & current portion 5,040 5,991 5,645 6,055 5,292
Long-term debt 10,578 9,293 11,847 12,709 11,106 Capex (Bt,bn) %
Bt,bn
Other liabilities 11,873 10,531 11,021 10,380 10,216 Capex / Net PPE (%)
Total liabilities 30,161 29,275 33,083 34,139 32,457 16.0 50
Paid-up capital 1,350 1,350 1,350 1,350 1,350 14.0
12.0 40
Share premium 970 970 970 970 970
5,808 6,206 7,321 8,769 10,501 10.0 30
Retained earnings
18,076 18,518 19,589 21,037 22,769 8.0
Shareholders equity 20
355 373 268 216 154 6.0
Minority interests
48,593 48,166 52,941 55,392 55,381 4.0 10
Total Liab.&Shareholders' equity
2.0
CASH FLOW (Btm) 0.0 0
Net income (1,733) 398 1,762 2,250 2,728 19 20 21 22 23E 24E 25E
Depreciation and amortization 3,167 3,133 3,975 4,263 4,525
Change in working capital 543 88 219 152 328 Debt serviceability
FX, non-cash adjustment & others (215) (176) (197) (334) (298)
Cash flows from operating activities 1,762 3,443 5,759 6,331 7,283 (ST debt + Interest) / EBITDA
Capex (Invest)/Divest (13,950) (935) (3,800) (5,000) (2,500) 12 (Debt + Interest) / EBITDA
Others 9,089 (2,238) (1,670) (2,300) (1,921)
10
Cash flows from investing activities (4,861) (3,173) (5,470) (7,300) (4,421)
Debt financing (repayment) 4,130 (334) (420) 1,272 (2,367) 8
Equity financing 0 0 0 0 0 6
Dividend payment 0 0 (370) (803) (996) 4
Others 9,089 (2,238) (1,670) (2,300) (1,921)
Cash flows from financing activities 4,130 (334) (789) 469 (3,362) 2
Net change in cash 1,031 (64) (500) (500) (500) 0
(12,188) 2,507 1,959 1,331 4,783 19 20 21 22 23E 24E 25E
Free cash flow (Btm)
FCF per share (Bt) (9.0) 1.9 1.5 1.0 3.5 Dividend payout
KEY ASSUMPTIONS 2021 2022 2023E 2024E 2025E Dividend (Bt)
Hotel occupancy rate 27% 18% 48% 74% 74% Payout ratio (%)
%
Room rate change -7% 4% 6% 15% 8%
RevPar change -67% -32% 187% 41% 8% 1.0 50
0.81
Food same-store-sale growth -22% -14% 20% 5% 3% 0.8 0.67 40
Food total sale growth -18% -10% 26% 11% 10% 0.55
0.6 0.52 30
0.4 20
0.2 10
0.00 0.00 0.00
0.0 0
19 20 21 22 23E 24E 25E

••• CENTEL 2
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CENTEL: Financial Tables – Quarter

QUARTERLY PROFIT & LOSS (Btm) 4Q21 1Q22 2Q22 3Q22 4Q22 Revenue trend
Revenue 3,653 3,681 4,193 4,433 5,195 Bt,bn Revenue (Bt,bn) (LHS) %
Cost of sales and services (2,194) (2,285) (2,519) (2,669) (3,021) Revenue growth (% YoY)
Gross profit 1,459 1,396 1,674 1,764 2,174 6.0 100
SG&A (1,246) (1,413) (1,619) (1,605) (1,658) 5.0 80
EBIT 214 (17) 55 159 516 4.0 60
Interest expense (167) (172) (177) (184) (193) 40
3.0
Other income/exp. 95 201 147 139 111 20
2.0 0
EBT 142 11 25 114 435
Corporate tax 74 (35) 12 (51) (65) 1.0 (20)
After-tax net profit (loss) 215 (23) 37 63 370 0.0 (40)
2Q21 4Q21 2Q22 4Q22
Minority interest (38) (21) 3 12 (11)
Equity earnings from affiliates (25) 0 (18) (48) 23 Revenue trend (accumulated)
Extra items 0 0 0 (105) 116 Accum. Revenue (Bt,bn)
% of FY Revenue %
Net profit (loss) 152 (44) 22 (78) 498
Reported EPS 0.11 (0.03) 0.02 (0.06) 0.37 20 100
100 120
Fully diluted EPS 0.11 (0.03) 0.02 (0.06) 0.37 100
15
Core net profit 152 (44) 22 27 382 67 70
80
Core EPS 0.11 (0.03) 0.02 0.02 0.28 45
10 47 60
EBITDA 908 750 862 952 1,281 40
5 21
20
KEY RATIOS
Gross margin (%) 39.9 37.9 39.9 39.8 41.9 0 0
2Q21 4Q21 2Q22 4Q22
EBITDA margin (%) 24.9 20.4 20.6 21.5 24.7
Operating margin (%) 5.8 (0.5) 1.3 3.6 9.9
Net profit trend (accumulated)
Net margin (%) 4.2 (1.2) 0.5 (1.8) 9.6
Core profit margin (%) 4.2 (1.2) 0.5 0.6 7.3 Accum. Profit (Bt,m)
Bt,m %
% of FY Profit
BV (Bt) 13.7 13.6 13.8 13.9 14.0 1,000 109
3.4 (1.0) 0.5 (1.7) 10.8 100 100 120
ROE (%) 500
ROA (%) 1.3 (0.4) 0.2 (0.6) 4.1 100
0
Current ratio (x) 0.6 0.7 0.4 0.5 0.6 62 80
0.8 0.9 0.5 0.8 0.8 (500) 60
Gearing ratio (x)
Interest coverage (x) 1.3 n.m. 0.3 0.9 2.7 (1,000) 40
(1,500) 20
QUARTERLY BALANCE SHEET (Btm)
(2,000) 0
Cash & Equivalent 3,354 3,489 2,799 3,359 3,137 2Q21 4Q21 2Q22 4Q22
Accounts receivacle 801 1,000 942 1,017 1,227
Inventory 748 709 762 811 1,024 Gross profit margin
PP&E-net 29,875 29,680 29,574 29,601 29,215
% FY GPM (%)
Other assets 13,814 13,422 13,947 13,700 13,562
Gross margin (%)
Total assets 48,593 48,300 48,024 48,487 48,166 50
Accounts payacle 2,669 2,500 2,693 2,944 3,460 40
ST debts & current portion 5,040 4,868 2,447 6,013 5,991
30
Long-term debt 10,578 11,149 7,516 9,604 9,293
Other liabilities 11,873 11,377 16,750 11,095 10,531 20
Total liabilities 30,161 29,894 29,405 29,656 29,275
10
Paid-up capital 1,350 1,350 1,350 1,350 1,350
Share premium 970 970 970 970 970 0
2Q21 4Q21 2Q22 4Q22
Retained earnings 5,808 5,764 5,786 5,708 6,206
Shareholders equity 18,076 18,032 18,238 18,451 18,518
EBIT margin
Minority interests 355 374 381 380 373
Total Liab.&Shareholders' equity 48,593 48,300 48,024 48,487 48,166 % FY EBIT margin (%)

15 EBIT margin (%)

KEY STATS 4Q21 1Q22 2Q22 3Q22 4Q22 10
Hotel occupancy rate 30% 35% 49% 55% 66% 5
0
Room rate growth 59% 16% 39% 19% -4% (5)
RevPar change 77% 197% 474% 313% 112% (10)
SSS growth -2% 10% 19% 43% 12% (15)
(20)
TSS growth 3% 15% 25% 51% 18% (25)
(30)
(35)
2Q21 4Q21 2Q22 4Q22

Company profile
Central Plaza Hotel Plc (CENTEL) comes under the umbrella of the Central group. It operates a range of hotels in Thailand and overseas, as well as
Quick Service Restaurants (QSRs) in Thailand. CENTEL has five key hotel brands— Centara Reserve, Centara Grand, Centara, Centra, and Cosi—
and 46 operating hotels in its portfolio as of 2021—proprietary hotels, JV hotels, and hotels under management contracts. Its food business operates 19
food brands and 1,389 outlets in Thailand. The key brands are KFC, Mister Donut, Auntie Anne’s, and Ootoya. In 2021 the food business comprised
81% (59% for 2019) of revenue and the hotel business 19% (41% for 2019).

••• CENTEL 3
 | RESEARCH

Figure 1 : 4Q22 results

FY Ended 31 Dec (Btm) 4Q22 4Q21 YoY % 3Q22 QoQ % 2022 2021 YoY %

Income Statement
Revenue 5,195 3,653 42 4,433 17 17,502 11,211 56
Cost of sales and services (3,021) (2,194) 38 (2,669) 13 (10,494) (7,613) 38
EBITDA 1,281 908 41 952 nm 3,846 1,690 128  The hotel biz marked a net profit
EBIT 516 214 nm 159 nm 713 (1,477) nm of Bt359m for 4Q22 (a loss of
Interest expense (193) (167) 15 (184) nm (726) (718) 1
Other income/exp. 111 95 17 139 (20) 598 424 41
Bt31m for 4Q21 and a profit pf
Equity earnings from affiliates 23 (25) nm (48) nm (44) (64) nm Bt321m for 4Q19)
Extra items 116 0 nm (105) nm 11 0 nm
EBT 435 142 nm 114 282 585 (1,771) nm
Corporate tax (65) 74 nm (51) 28 (138) 78 nm
 The QSR biz reported a net profit
Minority interest (11) (38) nm 12 nm (16) 24 nm of Bt139m for 4Q22 (a profit of
Net profit (loss) 498 152 nm (78) nm 398 (1,733) nm Bt184m for 4Q21 and a profit of
Reported EPS 0.37 0.11 nm (0.06) nm 0.29 (1.28) nm Bt50m for 4Q19)
Core net profit 382 152 nm 27 1,317 387 (1,733) nm

Key ratios  The SG&A/sales ratio was 32%

Gross margin (%) 41.9 39.9 39.8 40.0 32.1 for 4Q22 (38% in 4Q21 and 34%
EBITDA margin (%) 24.7 24.9 21.5 22.0 15.1
in 4Q19)
EBIT margin (%) 9.9 5.8 3.6 4.1 (13.2)
Tax rate (%) 14.9 (51.9) 44.6 23.6 4.4
Net margin (%) 9.6 4.2 (1.8) 2.3 (15.5)  CENTEL’s gearing ratio was 0.8x
Current ratio (x) 0.6 0.6 0.5 0.6 0.6 at end 2022
Gearing ratio (x) 0.8 0.8 0.8 0.8 0.8
Interest coverage (x) 2.7 1.3 0.9 1.0 (2.1)

Balance Sheet
Cash & Equivalent 3,137 3,354 (6) 3,359 (7)
Total assets 48,166 48,593 (1) 48,487 (1)
ST debts & current portion 5,991 5,040 19 6,013 (0)
Long-term debt 9,293 10,578 (12) 9,604 (3)
Total liabilities 29,275 30,161 (3) 29,656 (1)
Retained earnings 6,206 5,808 7 5,708 9
Shareholders equity 18,518 18,076 2 18,451 0
Minority interests 373 355 5 380 (2)
BV (Bt) 14.0 13.7 2 13.9 0

Source: Bualuang Research estimates

••• CENTEL 4
 | RESEARCH

ESG Total Score = 2.6/3.0

Environmental Score 2.6

CENTEL is committed to environmental sustain-

ability with new long-term goals to meet climate-
related targets, including a 20% reduction (from
the 2019 base year) in energy and water usage,
greenhouse gas emissions, and the amount of
waste sent to landfills by the company. In 2021,
CENTEL installed additional solar panels in its
food business. The firm achieved 61% of its goal
to cut the amount of landfill waste by 20% from
2019. CENTEL achieved 37% of its goal for
recycling over 50%. It has also reported its
greenhouse gas emissions and projects aimed at
cutting them

Social Score 2.6 Governance

Governance Score 2.6

CENTEL is committed to enhancing the CENTEL was listed in the Thailand Sus-
potential and quality of life of employees, tainability Index (THSI) in 2021. It was also the
supporting equality and human rights, and recipient of an “Excellent” CG scoring from the
helping society. In 2021, it achieved 88.9% of Thai Institute of Directors Association in 2021.
its goal to have female managers in its hotel CENTEL joined the Thai Private Sector
and food businesses comprising more than Collective Action Coalition Against Corruption
50% of the total. CENTEL focuses on hiring (CAC) since 2016.
local people, and providing income-generating All managers and executives are required to
opportunities to vulnerable, such as people with review the company’s Code of Conduct and
disabilities, the underprivileged, and the elderly, take a test—90.37% of employees at
and supporting local products and services to supervisory and operational levels took the test
generate economic growth for nearby during 2021. CENTEL has achieved 37%
communities. progress in encouraging suppliers to sign Code
. of Conduct & Guidelines for business partners
and suppliers.

••• CENTEL 5
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BUALUANG SECURITIES PUBLIC COMPANY LIMITED (BLS) is a subsidiary of BANGKOK BANK PUBLIC COMPANY LIMITED (BBL). This document
is produced based upon sources believed to be reliable but their accuracy, completeness or correctness is not guaranteed. The statements or
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ADVANC AEONTS AMATA AOT BDMS BH CBG CENTEL CPALL DTAC EGCO GLOBAL GPSC IRPC KBANK
KCE KTC MINT PTG PTT PTTEP PTTGC SCB SPRC TASCO TOP WHA ESSO CKP STA
BGRIM GULF MTC AWC TCAP CRC CPF CPN HANA HMPRO IVL OSP SAWAD THANI BANPU
BCH BTS CK SCC STEC TISCO TRUE TU INTUCH RATCH VGI SCGP TQM COM7 DOHOME
JMT CHG TMB BAM BCP BCPG AP KTB KKP OR BEM GUNKUL LH EA SPALI
RBF EPG STGT MAJOR MEGA ACE JMART BEC SYNEX QH BLA KEX RCL SINGER SIRI
STARK TIDLOR TTA RS FORTH PSL TIPH

BUALUANG SECURITIES PUBLIC COMPANY LIMITED IS OR MAY BE AN UNDERWRITER/CO-UNDERWRITER/JOINT LEAD IN RESPECT OF

THE INITIAL PUBLIC OFFERING (IPO) OF SECURITIES.

Lead underwriter/
Financial Advisor Underwriter/
Co-underwriter

CG Rating

Score Range Score Range Description

90 – 100 Excellent
80 – 89 Very Good
70 – 79 Good
60 – 69 Satisfactory
50 – 59 Pass
Below 50 No logo given N/A

Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC)
under Thai Institute of Directors
 companies that have declared their intention to join CAC, and
 companies certified by CAC.

••• CENTEL 6
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CORPORATE GOVERNANCE REPORT DISCLAIMER

This research report was prepared by Bualuang Securities Public Company Limited and refers to research prepared by Morgan Stanley. Morgan Stanley
does not warrant or guarantee the accuracy or completeness of its research reports. Morgan Stanley reserves copyright and other proprietary rights in
the material reproduced in this report. Morgan Stanley is under no obligation to inform Bualuang Securities or you if the views or information referred to
or reproduced in this research report change.

Corporate Governance Report disclaimer

The disclosure of the survey result of the Thai Institute of Directors Association (IOD) regarding corporate governance is made pursuant to the policy of
the Office of the Securities and Exchange Commission. The IOD survey is based on the information of a company listed on the Stock Exchange of
Thailand and the Market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is
from the perspective of a third party. It is not an evaluation of operation and is not based on inside information.
The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey result may be
changed after that date. Bualuang Securities Public Company Limited neither confirms nor certifies the accuracy of such survey results.

“Disclaimer: The disclosure of the Anti-Corruption Progress Indicators of a listed company on the Stock Exchange of Thailand, which is assessed by the
relevant institution as disclosed by the Office of the Securities and Exchange Commission, is made in order to comply with the policy and sustainable
development plan for the listed companies. The relevant institution made this assessment based on the information received from the listed company, as
stipulated in the form for the assessment of Anti-corruption which refers to the Annual Registration Statement (Form 56-1), Annual Report (Form 56-2),
or other relevant documents or reports of such listed company. The assessment result is therefore made from the perspective of a third party. It is not an
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BUALUANG RESEARCH – RECOMMENDATION FRAMEWORK

STOCK RECOMMENDATIONS SECTOR RECOMMENDATIONS

BUY: Expected positive total returns of 15% or more over the next 12 OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is
months. expected to outperform the relevant primary market index over the next 12 months.
HOLD: Expected total returns of between -15% and +15% over the next 12 NEUTRAL: The industry, as defined by the analyst's coverage universe, is
months. expected to perform in line with the relevant primary market index over the next 12
SELL: Expected negative total returns of 15% or more over the next 12 months.
months. UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is
TRADING BUY: Expected positive total returns of 15% or more over the next expected to underperform the relevant primary market index over the next 12
3 months. months.

••• CENTEL 7
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