Sector - Hotels & Travels

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Contra
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Re: Sector - Hotels & Travels

Postby Contra » Wed May 24, 2017 11:16 am

I just went through quarterly reports of HSIG, RHTL, GHLL and KHL hotels. They are debt free hotels. They have more current assets than current liabilities as well. We need depth analysis to pick future winners in the hotel sector. However, in a bull market share prices of hotels also should adjust according to the broader market.
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Re: Sector - Hotels & Travels

Postby Blue Whale » Wed May 24, 2017 11:18 am

I have given the Debt/Equity ratio for all the hotels in my chart. You can refer them.

Also just see how Kandy Hotels, Ghaladhari, Stafford , etc are moving now.
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Re: Sector - Hotels & Travels

Postby Contra » Wed May 24, 2017 12:46 pm

Blue Whale wrote:Given below is the snapshot of hotels made profits during the 9months period ending 31st Dec 2016. I have made it descending order based on ROE figures.
Profitable hotels for 9 months ending 31 Dec 16.jpg

Only four hotels generating ROE over and above 10%.

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Thank you for the above analysis.Above is based on the 9 months ended 31 December 2016. Am I right? When we include quarterly earning ended 31st March 2017 there should be big difference in above figures especially on ROE. Some hotels have made profit more than 50%, during last quarter.We see the highest occupancy level during this period.
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Re: Sector - Hotels & Travels

Postby Contra » Wed May 24, 2017 12:48 pm

Xmart wrote:Thanks BW,
you have summarized everything that i wanted to say. thanks again saving my few good hours.
i would like to add something to your analysis..
    1. 2016 Q4 Tourist arrival u by 3.4% compared to 2015 Q4 despite Airport rehabilitation, which caused February and March arrivals to drop by 0.1% and 2.5% respectively.
    2. 2017 April Tourist Arrival is increased by 17.5% compared to 2016 April
    3. high spending tourist from USA, EU and Russia have increased

Capture.PNG

even though last quarter numbers were increased, we could see a PAT declining due to high cost of sales and finance cost. that is why we should screen and select less debt hotels with high occupancy rate in this category.

Thanks


That is why we should screen and select less debt hotels with high occupancy rate in this category.

This is a good strategy. Thanks.
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Re: Sector - Hotels & Travels

Postby Blue Whale » Wed May 24, 2017 12:56 pm

There is a mix results contra. The above is not only 9M it is trailing 4Q based ROE. If we look at the Q4 release results so far, some have released good results but some have very poor results too, ex. AHUN. But when we take the plantation sector 90% of the results released so far were outstanding.

Therefore to pick the best hotels we don't need to wait till the release of all quarterly results of hotels. From the above you can pick the best.

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Re: Sector - Hotels & Travels

Postby Contra » Wed May 24, 2017 1:19 pm

Thanks BW. In addition, we should pick on the basis of future earnings, future occupancy levels etc. In some areas we should see more leisure activities. At the moment, I am glancing balance sheets of few hotels especially less debt hotels.
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Re: Sector - Hotels & Travels

Postby Blue Whale » Wed May 24, 2017 1:22 pm

Right, you can have a forecast then. But even without that we can see what's inside the numbers. My picks are AHPL, TRAN, KHC, STAF and GHLL. Let me know If you found any one better than this lot and why you think so.
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Re: Sector - Hotels & Travels

Postby Contra » Wed May 24, 2017 1:24 pm

Blue Whale wrote:Right, you can have a forecast then. But even without that we can see what's inside the numbers. My picks are AHPL, TRAN, KHC, STAF and GHLL. Let me know If you found any one better than this lot and why you think so.


Above shares also should have demand in a bull market. Now we can see there are some interest on hotel stocks.
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Re: Sector - Hotels & Travels

Postby Blue Whale » Wed May 24, 2017 4:43 pm

We have got Taj results but not very encouraging for the last quarter of 2016/17. Reduced losses but still a loss. :(
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Re: Sector - Hotels & Travels

Postby SHARK » Wed May 24, 2017 5:18 pm

looking forward to STAF ! anyone :D
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Re: Sector - Hotels & Travels

Postby Blue Whale » Wed May 24, 2017 5:34 pm

Yes. I am expecting a little drop from last year as given in my forecasts.
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Re: Sector - Hotels & Travels

Postby Leopold » Wed May 24, 2017 5:50 pm

SHARK wrote:looking forward to STAF ! anyone :D


I am with you Shark..!!

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Re: Sector - Hotels & Travels

Postby Blue Whale » Wed May 24, 2017 6:26 pm

Trans Asia Hotels results. Similar to Taj

Revenue for Q4 is flat YoY, The change in fair value of investment property and reduction in finance cost help to improve the bottom line, if not that will also be flat. So this result added to the 12 months period. From the core business area I don't see and notable improvement from hotel sector yet.

If you compare with Plantation sector I don't see any significant reason for a strong segment reshape in hotel sector.
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Re: Sector - Hotels & Travels

Postby Blue Whale » Mon May 29, 2017 7:48 pm

Blue Whale wrote:Trans Asia Hotels results. Similar to Taj

Revenue for Q4 is flat YoY, The change in fair value of investment property and reduction in finance cost help to improve the bottom line, if not that will also be flat. So this result added to the 12 months period. From the core business area I don't see and notable improvement from hotel sector yet.

If you compare with Plantation sector I don't see any significant reason for a strong segment reshape in hotel sector.


What I cautioned in the last week is becoming a reality now. We can't see a good improvement from hotel sector yet even in their best quarter. Today we saw results of many hotels and generally neither of them are attractive. Dolfin, Hotel Sigiriya, Serendib Hotels, etc all are same. I have noticed a one common factor is that most of these hotels have incurred higher administration costs for the last quarter. I wonder what could be the possible reason for such an increase over many hotels. If there are any members in TEC who knows the reason behind this development can add to this.

Finally as I said there is nothing behind in performance of hotel sector to spark a run to compare with either Plantation sector or Finance sector. But I do believe that there is a strong case behind manufacturing sector as most of those stocks reported fantastic earnings but the sector doesn't seem to be in a shape for a sustainable run. But I believe that has to happen very soon.
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Re: Sector - Hotels & Travels

Postby mdcpk » Mon May 29, 2017 8:33 pm

Out of all Hotel Sigiriya has done really well in last quarter. I don't know why they declared a very low dividend this time

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Re: Sector - Hotels & Travels

Postby dhanurrox » Mon May 29, 2017 9:03 pm

mdcpk wrote:Out of all Hotel Sigiriya has done really well in last quarter. I don't know why they declared a very low dividend this time

I had it with lot of hopes.Did the CSE fellows write 2 instead of 12? :( :(

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Re: Sector - Hotels & Travels

Postby sashimaal » Mon May 29, 2017 9:16 pm

Hotel Sigiriya results look better YOY due to tax adjustments

PBIT is down


mdcpk wrote:Out of all Hotel Sigiriya has done really well in last quarter. I don't know why they declared a very low dividend this time
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Re: Sector - Hotels & Travels

Postby sashimaal » Mon May 29, 2017 9:18 pm

BS shows a big amount as "Other current financial assets"

dhanurrox wrote:
mdcpk wrote:Out of all Hotel Sigiriya has done really well in last quarter. I don't know why they declared a very low dividend this time

I had it with lot of hopes.Did the CSE fellows write 2 instead of 12? :( :(
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Re: Sector - Hotels & Travels

Postby Blue Whale » Mon May 29, 2017 9:27 pm

mdcpk wrote:Out of all Hotel Sigiriya has done really well in last quarter. I don't know why they declared a very low dividend this time

No . The results are very flat. Look at the gross profit. Can't satisfy with this.
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Re: Sector - Hotels & Travels

Postby Xmart » Tue May 30, 2017 8:00 am

It seems that most awaited hotel rally is not ready yet to the grand launch.
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Re: Sector - Hotels & Travels

Postby Blue Whale » Tue May 30, 2017 8:03 am

Yes X. It may not be this year for sure. Lets see next year.
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Re: Sector - Hotels & Travels

Postby Contra » Tue May 30, 2017 3:13 pm

There are hotel stocks that are discounted and trading great discount to implied price. Some hotels had mountain of debt in their book in the past and now they don’t have any debt. In a bull market, hotel stocks also will have demand. Any way it is time to find out some emerging hotels as well. For anything we should see strong bull market. Weak market will have weak share prices. Strong market will have strong share prices.
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Re: Sector - Hotels & Travels

Postby Blue Whale » Tue May 30, 2017 3:23 pm

But really strong companies do wonders in any kind of market. For them the market condition is just a bonus.
Examples, LLUB, CCS, CTC, HHL,HNB etc. What is really needed is good long term value. The rest is automatic.
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Re: Sector - Hotels & Travels

Postby Contra » Wed May 31, 2017 12:38 pm

Some hotel stocks have some value now. They cannot stagnate for a long time. There is a big difference between stock prices in bear market and stock prices in bull market. Buying stocks in a bear market or weak market is a prudent strategy. Similarly, buying quality bearish stocks before they become bullish stocks make some sense to me. In my view in a bull market stock prices of some hotels may explode when they get strong momentum. Don’t expect strong share prices in weak markets. Until we see end of prolong bear market we cannot expect strong share prices for hotels as well.
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Re: Sector - Hotels & Travels

Postby Contra » Sun Jun 18, 2017 12:33 pm

Overlooked Eden hotel beat others suddenly.Currently EDEN is in bullish territory according to daily, weekly and monthly indicators. It is one of my old friends and I just started to revisit them one by one to find out some opportunities.
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