Thailand Sector Update - RHB TradeSmart · 5/9/2018 · improvement from February, which encountered the 2018 Lunar New Year high base effect. Consequently, 1Q19 ’stotal arrivals

Thailand Sector Update

See important disclosures at the end of this report 1

9 May 2019 Consumer Cyclical | Leisure & Entertainment

Hospitality Overweight (Maintained)

Look To Remaining Quarters; Stay O/W Stocks Covered 4 Ratings (Buy/Neutral/Sell): 2 / 1 / 1

Last 12m Earnings

Positive • Keep OVERWEIGHT. While 1Q19 was not a good high season for tourism,

we expect to see recovery on stimulus measures and 2018’s low quarterly earnings base – this should support YoY growth of our covered hotels over 2Q19-4Q19. The long-term outlook remains promising, with quality free independent travellers (FITs) sustaining tourism income momentum. Top Picks: Erawan and Minor International (Minor). Key risks include slower recovery in Chinese visitor numbers and weak local consumption for firms with food businesses.

• Foreign visitor numbers to Thailand in March were flattish at 3.47m (-0.7% YoY, -3% MoM). Chinese visitor numbers dropped 2% YoY – an improvement from February, which encountered the 2018 Lunar New Year high base effect. Consequently, 1Q19’s total arrivals stood at 10.8m (+2% YoY, +11% QoQ), with Chinese tourists numbering 3.1m (-2% YoY, +44% QoQ). The free visa-on-arrival measure granted to 21 nations – including China – effectively boosted momentum vis-à-vis 4Q18.

• Four Thai hospitality stocks under our coverage may see weak earnings growth in 1Q19. The strongest should be Airports of Thailand (AoT) (+6% YoY, +20% QoQ), with Minor the weakest (-24% YoY, -39% QoQ) – key reason being weak Chinese visitor numbers vs Feb 2018’s Lunar New Year high base. We expect hotel performance in resort areas to remain challenging despite Bangkok remaining healthy. Firms with food businesses may earn negative SSSG, as local consumption prior to the March election was slower than expected. The dip in Chinese arrivals may also result in unexciting 2QFY19 (Mar) earnings for AoT. We estimate the sector’s aggregated net profit growth for 2019 at 15% YoY.

• We expect an improving industry outlook from 2Q19 onwards. The free visa-on-arrival scheme was extended by a further six months to end-October. The Government recently launched tax breaks for local visitors to tier-1 and tier-2 cities during May-June as well to spur domestic tourism. Growth may also be driven by a low base YoY, caused by the World Cup finals in 2Q18-3Q18, and Phuket’s boating accident, which impacted the whole of 2H18. Aside from the growing Indian market (5% of total), increasing visits by East Asian ex-China travellers – Hong Kong, Japan, and Taiwan (14% of total arrivals) – should be another growth driver. We maintain our 2019 assumptions: 41m foreign arrivals (+7% YoY) – with 11.8m Chinese (+12% YoY) – and total tourism receipts of THB2.15trn (+7% YoY).

• It is becoming obvious that Chinese arrivals are moving towards FITs (60% of the total) vis-à-vis tour groups. This has been on public and private sector initiatives to develop tourism-related facilities. Despite a smaller growth in visitor numbers expected over the next decade, we believe such FITs – often middle-income earners – can help stabilise tourism income growth. This trend should eventually benefit hotel operators that we cover.

• Erawan and Minor preferred. We continue to like Erawan, as it should benefit strongly from industry improvements – its quarterly earnings growth may accelerate from 2Q19 onwards. Minor’s full-year consolidation of NH Hotel’s financials may strengthen core profit growth and lower its exposure to the challenging food business. This is because its NH and Tivoli hotels in Europe are entering the 2Q-3Q high travel season. A buy-on-dip strategy may be applicable for both stocks, with regards to their weak 1Q19 performances.

Top Picks Target Price The Erawan Group (ERW TB) – BUY THB9.20 Minor International (MINT TB) – BUY THB50.00 Analyst

Vatcharut Vacharawongsith +66 2088 9736 [email protected]

International tourists arrivals and receipts

Source: Ministry of Tourism & Sports, RHB

Quick rebound in Chinese visitors


Company name Rating TP

(THB) % upside

(Downside) P/E (x)

Dec-19F P/BV (x) Dec-19F

Yield (%) Dec-19F

Erawan Buy 9.20 32.4 26.3 2.7 1.6 Minor International Buy 50.00 33.3 22.5 2.9 1.6 Central Plaza Hotel Neutral 41.00 0.6 24.7 3.6 1.6 Airports Of Thailand Take Profit 55.50 (19.0) 35.3 6.2 1.7 Note: Share price related data based on closing as of 7 May 2019 Source: Company data, RHB, Bloomberg

10.110.810.011.711.5

13.814.514.614.115.9

19.222.4

26.724.8

29.932.5

35.438.3

41.044.0

0

500

1,000

1,500

2,000

2,500

0

5

10

15

20

25

30

35

40

45

50

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

F

2020

F

Tourist arrivals (m) Foreign tourist income (THBbn) - RHS

-50%

0%

50%

100%

150%

200%

250%

300%

350%

Jan-

10Ap

r-10

Jul-1

0O

ct-1

0Ja

n-11

Apr-1

1Ju

l-11

Oct

-11

Jan-

12Ap

r-12

Jul-1

2O

ct-1

2Ja

n-13

Apr-1

3Ju

l-13

Oct

-13

Jan-

14Ap

r-14

Jul-1

4O

ct-1

4Ja

n-15

Apr-1

5Ju

l-15

Oct

-15

Jan-

16Ap

r-16

Jul-1

6O

ct-1

6Ja

n-17

Apr-1

7Ju

l-17

Oct

-17

Jan-

18Ap

r-18

Jul-1

8O

ct-1

8Ja

n-19

Coup d'état22 May 2014

Chinese zero-dollar tour crackdown

Oct 2016

Mega-floodingOct - Nov 2011

Red-shirt rally Mar - May 2010

Erawan Shrine bombattack in Bangkok

Aug 2015

Phuket boataccidentJul 2018

mailto:[email protected]

Hospitality Thailand Sector Update



Look ahead to remaining quarters 1Q19 arrivals – a high-base effect. The Tourism & Sports Ministry announced in April that total international visitor numbers to Thailand for March was flattish at 3.47m (-0.7% YoY, -3% MoM). This resulted in total arrivals for 1Q19 reaching 10.8m (+2% YoY, +11% QoQ), with Chinese visitors totalling 3.1m (-2% YoY, +44% QoQ). We believe the free visa-on-arrival measure granted to 21 nations – including China – effectively boosted momentum when compared to 4Q18’s numbers, as seen in the 44% QoQ rise.

The Government extended this measure for another six months from April to end-October. The outcome so far has been a 2% YoY dip, but this was due to the high base in Feb 2018, the Lunar New Year month. China has remained the biggest contributor to the Thai tourism industry, and its contribution to the total foreign visitor mix declined slightly to 29% vs 1Q18’s 30%.

The temporary PM2.5 dust haze in the northern province of Chiang Mai – another hub for Chinese tourists – as well as a transition in Chinese visitor profiles from tour groups to FITs could be factors that undermined arrival numbers for March. Nonetheless, there was an improvement in growth magnitude for monthly Chinese arrivals: -2% YoY in March from -13% YoY in February.

Meanwhile, other key source markets remained healthy in 1Q19: East Asians ex-China (+9% YoY, 13% of total arrivals), ASEAN (+5% YoY, 22% of total arrivals), and India (+25% YoY, 4% of total arrivals).

We maintain our estimated 2019 total international arrivals assumption of 41m (+7% YoY) and Chinese arrivals of 11.8m (+12% YoY). We are still expecting stronger growth in total international arrivals in 2Q19-4Q19. A low base in terms of European and Russian arrivals last year during the World Cup Finals period may benefit visitor numbers in June-July, while the low base of Chinese visitors – post the Phuket boating accident in Jul 2018 – should result in a spike in total arrivals from China throughout 2H19.

Figure 1: Monthly international tourist arrivals to Thailand


Figure 2: Monthly international tourist arrivals to Thailand (% growth YoY)


('000) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec FY2010 1,606 1,615 1,439 1,108 827 965 1,276 1,271 1,215 1,317 1,479 1,820 15,9362011 1,806 1,802 1,702 1,552 1,407 1,485 1,720 1,727 1,486 1,422 1,292 1,829 19,2302012 1,992 1,854 1,896 1,686 1,547 1,645 1,816 1,927 1,612 1,801 2,144 2,435 22,3542013 2,318 2,367 2,322 2,058 1,944 2,062 2,149 2,356 1,995 2,055 2,378 2,542 26,5472014 2,283 2,075 2,018 1,935 1,671 1,491 1,915 2,076 1,856 2,181 2,438 2,841 24,7802015 2,617 2,671 2,563 2,420 2,309 2,283 2,643 2,600 2,031 2,229 2,549 2,987 29,9012016 3,001 3,089 2,949 2,643 2,477 2,433 2,946 2,874 2,408 2,256 2,454 3,058 32,5882017 3,197 2,989 3,008 2,828 2,591 2,711 3,088 3,133 2,556 2,724 3,021 3,536 35,3812018 3,545 3,567 3,497 3,093 2,755 3,025 3,176 3,229 2,656 2,712 3,178 3,846 38,2772019 3,719 3,573 3,473

% YoY Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec FY2010 26.4 41.9 16.3 2.1 -10.5 1.1 16.5 10.6 16.7 8.9 8.6 8.0 12.62011 12.5 11.6 18.3 40.1 70.3 53.9 34.8 35.9 22.4 8.0 -12.7 0.5 20.72012 10.3 2.8 11.4 8.6 9.9 10.8 5.6 11.6 8.4 26.6 66.0 33.1 16.22013 16.4 27.7 22.5 22.0 25.7 25.4 18.4 22.2 23.8 14.1 10.9 4.4 18.82014 -1.5 -12.3 -13.1 -6.0 -14.0 -27.7 -10.9 -11.9 -7.0 6.1 2.5 11.8 -6.72015 14.6 28.7 27.0 25.1 38.2 53.1 38.0 25.2 9.5 2.2 4.6 5.1 20.72016 14.7 15.7 15.1 9.2 7.2 6.6 11.5 10.5 18.5 1.2 -3.7 2.4 9.02017 6.5 -3.2 2.0 7.0 4.6 11.4 4.8 9.0 6.2 20.7 23.1 15.6 8.62018 10.9 19.3 16.3 9.4 6.4 11.6 2.8 3.0 3.9 -0.4 5.2 8.8 8.22019 4.9 0.2 -0.7




Figure 3: International tourists to Thailand by source markets


Figure 4: Chinese visitors to Thailand: Contributions and growth


2019 Songkran ground checks update. Our visits to various places in Bangkok showed that the traditional Thai New Year was in the same lively tone vs 2018, with both locals and foreigners joining the celebration around the capital. There were new water splashing destinations including Icon Siam – the luxurious shopping mall landmark on the Chao Phraya River bank – but it was not as popular as other spots ie. Siam Square, Silom Rd, Khaosan Rd, and CentralWorld.

Major retail malls in Bangkok’s outskirts like Central Plaza WestGate and Mega Bangna were crowded with locals joining the water festival. The ongoing PM2.5 dust haze in the northern region caused partial cancellation of hotel bookings there during Songkran, but we expect minimal impact to hoteliers under our coverage given that most of them have only a few managed properties there.

Based on this, we believe Songkran in 2019 is likely to generate up to THB136bn (+2.8% YoY) and THB21bn (+8.2% YoY) in consumer spending and tourism income respectively, with foreign arrivals of 0.55m (+8% YoY) and local Thai travellers of 3.1m trips (+3% YoY).

7 9 1217 19

27 27 28 2813 1311

11 11

11 11 9 11

6 6 66 5

5 4 4 4

5 5 55 5

5 4 5 5

4 5 44 4

4 4 5 5

5 5 54 4

4 4 4 4

45 6

7 6

3 3 4 4

54 4

3 43 3 3 3

44 3

3 33 3 3 3

4 4 44 3

3 3 3 3

43 41 39 36 37 33 33 33 32

2010 2011 2012 2013 2014 2015 2016 2017 2018

Others

Singapore

USA

UK

Russia

India

Laos

South Korea

Japan

Malaysia

China

8.0 7.46.1 6.3 6.6 7.5 6.9 6.4 5.5

7.09.0

12.5

17.618.7

26.626.927.727.5

29.329.5

-40%

-20%

0%

20%

40%

60%

80%

0%

5%

10%

15%

20%

25%

30%

35%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

F20

20F

Contribution of Chinese tourists to total arrivalsChinese tourist growth (%YoY) - RHS




Figure 5: Bangkok’s newest luxury mall on the banks of Chao Phraya River, Icon Siam, ran its first water-splashing event

Source: RHB

Figure 6: A livelier Songkran event at Central World

Source: RHB

Tax breaks to support 2Q19F outlook. Apart from the extension of free visa-on-arrival for 21 nations including China and India for another six months until end-Oct 2019, the Government last Tuesday approved eligible taxpayers to redeem their annual personal income tax from payments for hotel accommodation and travel packages to tier-1 provinces amounting to THB15,000, and tier-2 provinces amounting to THB20,000 during 30 Apr-30 Jun 2019.




However, the aggregated redemption for both city types must not exceed THB20,000. We expect more tourism stimulus measures to be carried out once the new Cabinet runs in 2H19F, which may attract both Thai locals and foreign visitors.

As for the tax redemption campaign, we expect Erawan to benefit the most, given that 95% of its revenue are generated from domestic hotels and the fact that its properties are located in both tiers-1 & 2 provinces. Thai guests also account for 19% of its total source markets.

This is followed by Central Plaza Hotel – 37% of total revenue comes from owned hotels in Thailand and 15% of its guest portfolio are Thais. Minor International generates c.13% of its topline revenue from its hotels in the kingdom, while its Thai guests account for a modest 5% of its feeder markets. Still, we are positive on Minor’s long-term outlook given its acquisition of the NH Hotel Group (NHH SM, NR) and a reduction in food business contributions on more intense competition in the market currently.

Quality Chinese FIT transition. Lifestyle changes as well as developing tourism application and infrastructure would facilitate and raise the number of Chinese middle-income earners travelling to the kingdom independently, instead of group travels. FITs accounts 60% of the total currently. It is in line with the Association of Thai Travel Agents (ATTA) revelation that the number of arrivals who are clients of ATTA members shrank 4% YoY to 5.57m in 2018, while its biggest market, China, continued to drop by 12% YoY in 1Q19. We thus expect a smaller growth in the number of international arrivals with CAGR of 4% over the next decade vs a CAGR of 7% during the 2010s.

Figure 7: Total domestic tourists and receipts Figure 8: Breakdown of Chinese tourists

Source: Ministry of Tourism & Sports, RHB Source: Ministry of Tourism & Sports, RHB

Figure 9: International tourists received by ATTA members (m)

Figure 10: Tour groups using ATTA members’ services

Source: Association of Thai Travel Agents Source: Association of Thai Travel Agents

109118

132 134 139 145153

166177

186483

589661 701

803870

957

1,068

1,1751,269

0

200

400

600

800

1,000

1,200

1,400

80

100

120

140

160

180

200

2011 2012 2013 2014 2015 2016 2017 2018 2019F 2020F

Domestic tourists (m trips) Domestic tourist income (THBbn) - RHS

47%44% 39%

45% 39% 40%53%

56% 61%

55% 61%60%

2012 2013 2014 2015 2016 2017

Group tour Non-group tour and free independent travelers (FIT)

2,761

4,610 4,632

7,9818,821

9,847




1Q19 earnings preview: Not a good high travel season Airports of Thailand. We expect AoT’s 1Q19F core profit to come in at THB7.67bn, a moderate increase of 6% YoY and a seasonal growth of 20% QoQ. We assume total passenger growth of 2% YoY and 5% QoQ for the quarter, leading to total core revenue of THB17.3bn (+6% YoY, +12% QoQ) and EBIT margin of 56.5% (+2.0ppts YoY, -0.5ppts QoQ). Its 1HFY19F earnings should account for 51% of our FY19 core profit forecasts of THB27.75bn (+10% YoY).

Its 2H19 earnings are expected to improve YoY following the industry recovery despite the low tourism season. Further developments on new investment projects and concession biddings may trigger near-term trading catalysts, but all of them would benefit AoT’s cash flows in a longer-term, from FY21F onwards, while earnings growth in this and the next fiscal years would remain at an organic mode of 10% and 5% respectively. We thus maintain our view that AoT’s full-year earnings growth is not reflective of its valuations and that it deserves a TAKE PROFIT recommendation at these levels.

Central Plaza Hotel. We expect Centel’s 1Q19F core profit to come in at THB825m (-7% YoY, +71% QoQ), based on total revenue of THB5.73bn (+2% YoY, +8% QoQ) and 45.2% GPM (-1.4ppts YoY, +5.8ppts QoQ). Both of its hotel and food businesses were weak. The hotel side was affected by a high base the same period last year when there was pent-up demand after the Royal Cremation Ceremony of the late King Rama IX.

Meanwhile, its Chinese and European guest arrivals remained soften this quarter, undermining performance of its properties in resort destinations. We expect its revenue per available room (RevPar) to decline, led by both occupancy rate and room rate shrinkage. Its food business was also weaker-than-expected given the delay in the General Election and the fact that Election campaigns were not as lively as to boost spending in upcountry areas. Costs were also increasing due to the chicken price hike for KFC (contributing 30% of total revenue). We have assumed -3% YoY SSSG and +4% TSSG for the quarter.

Note that the fume incident at CentralWorld retail mall on 10 Apr have had no impact to its flagship property Centara Grand at CentralWorld. However, the temporary guest evacuation for safety may allow it to claim a non-material amount of insurance premium for business interruption.

Minor International. We expect Minor to report 1Q19F core profit of THB1.30bn (-24% YoY, -39% QoQ). Consolidation of the NH Hotel Group (NHH SP, NR) may support its core revenue to surge by 89% YoY to THB29.1bn, but earnings may be undermined by the challenging environment for Thailand’s hotels in the upcountry areas and food business (-6% YoY SSSG), which have lowered sales and profit margins, together with interest expense hike on debt financing for the NHH purchase. The weak QoQ earnings may be due to NHH’s low travel season in western countries and smaller other incomes vs 4Q18.

The Erawan Group. We expect Erawan’s 1Q19F core profit to come in at THB270m (-6% YoY, +50% QoQ). Total revenue is forecasted at THB1.76bn, a mild increase of 3% YoY from the opening of new hotels over the past 12-month period, and seasonal growth of 8% QoQ. Its Hop Inns both in Thailand and the Philippines focusing on local guests are still doing well, along with with its upper scale properties in Bangkok.

Nonetheless, apart from a high base during the same period last year, there was still price competition among upcountry hotel players to fill up empty rooms, as Chinese tourists were still on a rebounding stage during that quarter. Excluding Hop Inn, we have assumed 87% occupancy rate (-3ppts YoY, +7ppts QoQ), flattish average room rate YoY, and an increase of 9% QoQ, leading to its RevPar falling 4% YoY and rising 16% QoQ. Lower operating leverage and a rise in financing cost may also undermine its bottomline YoY.

7

RHB Guide to Investment Ratings Buy: Share price may exceed 10% over the next 12 months Trading Buy: Share price may exceed 15% over the next 3 months, however

longer-term outlook remains uncertain Neutral: Share price may fall within the range of +/- 10% over the next

12 months Take Profit: Target price has been attained. Look to accumulate at lower levels Sell: Share price may fall by more than 10% over the next 12 months Not Rated: Stock is not within regular research coverage Investment Research Disclaimers RHB has issued this report for information purposes only. This report is intended for circulation amongst RHB and its affiliates’ clients generally or such persons as may be deemed eligible by RHB to receive this report and does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. This report is not intended, and should not under any circumstances be construed as, an offer or a solicitation of an offer to buy or sell the securities referred to herein or any related financial instruments. This report may further consist of, whether in whole or in part, summaries, research, compilations, extracts or analysis that has been prepared by RHB’s strategic, joint venture and/or business partners. No representation or warranty (express or implied) is given as to the accuracy or completeness of such information and accordingly investors should make their own informed decisions before relying on the same. This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to the applicable laws or regulations. By accepting this report, the recipient hereof (i) represents and warrants that it is lawfully able to receive this document under the laws and regulations of the jurisdiction in which it is located or other applicable laws and (ii) acknowledges and agrees to be bound by the limitations contained herein. Any failure to comply with these limitations may constitute a violation of applicable laws. All the information contained herein is based upon publicly available information and has been obtained from sources that RHB believes to be reliable and correct at the time of issue of this report. However, such sources have not been independently verified by RHB and/or its affiliates and this report does not purport to contain all information that a prospective investor may require. The opinions expressed herein are RHB’s present opinions only and are subject to change without prior notice. RHB is not under any obligation to update or keep current the information and opinions expressed herein or to provide the recipient with access to any additional information. Consequently, RHB does not guarantee, represent or warrant, expressly or impliedly, as to the adequacy, accuracy, reliability, fairness or completeness of the information and opinion contained in this report. Neither RHB (including its officers, directors, associates, connected parties, and/or employees) nor does any of its agents accept any liability for any direct, indirect or consequential losses, loss of profits and/or damages that may arise from the use or reliance of this research report and/or further communications given in relation to this report. Any such responsibility or liability is hereby expressly disclaimed. Whilst every effort is made to ensure that statement of facts made in this report are accurate, all estimates, projections, forecasts, expressions of opinion and other subjective judgments contained in this report are based on assumptions considered to be reasonable and must not be construed as a representation that the matters referred to therein will occur. Different assumptions by RHB or any other source may yield substantially different results and recommendations contained on one type of research product may differ from recommendations contained in other types of research. The performance of currencies may affect the value of, or income from, the securities or any other financial instruments referenced in this report. Holders of depositary receipts backed by the securities discussed in this report assume currency risk. Past performance is not a guide to future performance. Income from investments may fluctuate. The price or value of the investments to which this report relates, either directly or indirectly, may fall or rise against the interest of investors. This report does not purport to be comprehensive or to contain all the information that a prospective investor may need in order to make an investment decision. The recipient of this report is making its own independent assessment and decisions regarding any securities or financial instruments referenced herein. Any investment discussed or recommended in this report may be unsuitable for an investor depending on the investor’s specific investment objectives and financial position. The material in this report is general information intended for recipients who understand the risks of investing in financial instruments. This report does not take into account whether an investment or course of action and any associated risks are suitable for the recipient. Any recommendations contained in this report must therefore not be relied upon as investment advice based on the recipient's personal circumstances. Investors should make their own independent evaluation of the information contained herein, consider their own investment objective, financial situation and particular needs and seek their own financial, business, legal, tax and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report. This report may contain forward-looking statements which are often but not always identified by the use of words such as “believe”, “estimate”, “intend” and “expect” and statements that an event or result “may”, “will” or “might” occur or be achieved and other similar expressions. Such forward-looking statements are based on

assumptions made and information currently available to RHB and are subject to known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement to be materially different from any future results, performance or achievement, expressed or implied by such forward-looking statements. Caution should be taken with respect to such statements and recipients of this report should not place undue reliance on any such forward-looking statements. RHB expressly disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or circumstances after the date of this publication or to reflect the occurrence of unanticipated events. The use of any website to access this report electronically is done at the recipient’s own risk, and it is the recipient’s sole responsibility to take precautions to ensure that it is free from viruses or other items of a destructive nature. This report may also provide the addresses of, or contain hyperlinks to, websites. RHB takes no responsibility for the content contained therein. Such addresses or hyperlinks (including addresses or hyperlinks to RHB own website material) are provided solely for the recipient’s convenience. The information and the content of the linked site do not in any way form part of this report. Accessing such website or following such link through the report or RHB website shall be at the recipient’s own risk. This report may contain information obtained from third parties. Third party content providers do not guarantee the accuracy, completeness, timeliness or availability of any information and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such content. Third party content providers give no express or implied warranties, including, but not limited to, any warranties of merchantability or fitness for a particular purpose or use. Third party content providers shall not be liable for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including lost income or profits and opportunity costs) in connection with any use of their content. The research analysts responsible for the production of this report hereby certifies that the views expressed herein accurately and exclusively reflect his or her personal views and opinions about any and all of the issuers or securities analysed in this report and were prepared independently and autonomously. The research analysts that authored this report are precluded by RHB in all circumstances from trading in the securities or other financial instruments referenced in the report, or from having an interest in the company(ies) that they cover. The contents of this report is strictly confidential and may not be copied, reproduced, published, distributed, transmitted or passed, in whole or in part, to any other person without the prior express written consent of RHB and/or its affiliates. This report has been delivered to RHB and its affiliates’ clients for information purposes only and upon the express understanding that such parties will use it only for the purposes set forth above. By electing to view or accepting a copy of this report, the recipients have agreed that they will not print, copy, videotape, record, hyperlink, download, or otherwise attempt to reproduce or re-transmit (in any form including hard copy or electronic distribution format) the contents of this report. RHB and/or its affiliates accepts no liability whatsoever for the actions of third parties in this respect. The contents of this report are subject to copyright. Please refer to Restrictions on Distribution below for information regarding the distributors of this report. Recipients must not reproduce or disseminate any content or findings of this report without the express permission of RHB and the distributors. The securities mentioned in this publication may not be eligible for sale in some states or countries or certain categories of investors. The recipient of this report should have regard to the laws of the recipient’s place of domicile when contemplating transactions in the securities or other financial instruments referred to herein. The securities discussed in this report may not have been registered in such jurisdiction. Without prejudice to the foregoing, the recipient is to note that additional disclaimers, warnings or qualifications may apply based on geographical location of the person or entity receiving this report. The term “RHB” shall denote, where appropriate, the relevant entity distributing or disseminating the report in the particular jurisdiction referenced below, or, in every other case, RHB Investment Bank Berhad and its affiliates, subsidiaries and related companies. RESTRICTIONS ON DISTRIBUTION Malaysia This report is issued and distributed in Malaysia by RHB Investment Bank Bhd. The views and opinions in this report are our own as of the date hereof and is subject to change. If the Financial Services and Markets Act of the United Kingdom or the rules of the Financial Conduct Authority apply to a recipient, our obligations owed to such recipient therein are unaffected. RHB Investment Bank Bhd has no obligation to update its opinion or the information in this report. Thailand This report is issued and distributed in the Kingdom of Thailand by RHB Securities (Thailand) PCL, a licensed securities company that is authorised by the Ministry of Finance, regulated by the Securities and Exchange Commission of Thailand and is a member of the Stock Exchange of Thailand. The Thai Institute of Directors Association has disclosed the Corporate Governance Report of Thai Listed Companies made pursuant to the policy of the Securities and Exchange Commission of Thailand. RHB

8

Securities (Thailand) PCL does not endorse, confirm nor certify the result of the Corporate Governance Report of Thai Listed Companies. Indonesia This report is issued and distributed in Indonesia by PT RHB Sekuritas Indonesia. This research does not constitute an offering document and it should not be construed as an offer of securities in Indonesia. Any securities offered or sold, directly or indirectly, in Indonesia or to any Indonesian citizen or corporation (wherever located) or to any Indonesian resident in a manner which constitutes a public offering under Indonesian laws and regulations must comply with the prevailing Indonesian laws and regulations. Singapore This report is issued and distributed in Singapore by RHB Securities Singapore Pte Ltd which is a holder of a capital markets services licence and an exempt financial adviser regulated by the Monetary Authority of Singapore. RHB Securities Singapore Pte Ltd may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, RHB Securities Singapore Pte Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact RHB Securities Singapore Pte Ltd in respect of any matter arising from or in connection with the report. Hong Kong This report is issued and distributed in Hong Kong by RHB Securities Hong Kong Limited (興業僑豐證券有限公司) (CE No.: ADU220) (“RHBSHK”) which is licensed in Hong Kong by the Securities and Futures Commission for Type 1 (dealing in securities) and Type 4 (advising on securities) regulated activities. Any investors wishing to purchase or otherwise deal in the securities covered in this report should contact RHBSHK. RHBSHK is a wholly owned subsidiary of RHB Hong Kong Limited; for the purposes of disclosure under the Hong Kong jurisdiction herein, please note that RHB Hong Kong Limited with its affiliates (including but not limited to RHBSHK) will collectively be referred to as “RHBHK.” RHBHK conducts a full-service, integrated investment banking, asset management, and brokerage business. RHBHK does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this research report. Investors should consider this report as only a single factor in making their investment decision. Importantly, please see the company-specific regulatory disclosures below for compliance with specific rules and regulations under the Hong Kong jurisdiction. Other than company-specific disclosures relating to RHBHK, this research report is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. United States This report was prepared by RHB and is being distributed solely and directly to “major” U.S. institutional investors as defined under, and pursuant to, the requirements of Rule 15a-6 under the U.S. Securities and Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, access to this report via Bursa Marketplace or any other Electronic Services Provider is not intended for any party other than “major” US institutional investors, nor shall be deemed as solicitation by RHB in any manner. RHB is not registered as a broker-dealer in the United States and does not offer brokerage services to U.S. persons. Any order for the purchase or sale of the securities discussed herein that are listed on Bursa Malaysia Securities Berhad must be placed with and through Auerbach Grayson (“AG”). Any order for the purchase or sale of all other securities discussed herein must be placed with and through such other registered U.S. broker-dealer as appointed by RHB from time to time as required by the Exchange Act Rule 15a-6. This report is confidential and not intended for distribution to, or use by, persons other than the recipient and its employees, agents and advisors, as applicable. Additionally, where research is distributed via Electronic Service Provider, the analysts whose names appear in this report are not registered or qualified as research analysts in the United States and are not associated persons of Auerbach Grayson AG or such other registered U.S. broker-dealer as appointed by RHB from time to time and therefore may not be subject to any applicable restrictions under Financial Industry Regulatory Authority (“FINRA”) rules on communications with a subject company, public appearances and personal trading. Investing in any non-U.S. securities or related financial instruments discussed in this research report may present certain risks. The securities of non-U.S. issuers may not be registered with, or be subject to the regulations of, the U.S. Securities and Exchange Commission. Information on non-U.S. securities or related financial instruments may be limited. Foreign companies may not be subject to audit and reporting standards and regulatory requirements comparable to those in the United States. The financial instruments discussed in this report may not be suitable for all investors. Transactions in foreign markets may be subject to regulations that differ from or offer less protection than those in the United States. DISCLOSURE OF CONFLICTS OF INTEREST RHB Investment Bank Berhad, its subsidiaries (including its regional offices) and associated companies, (“RHBIB Group”) form a diversified financial group, undertaking various investment banking activities which include, amongst others, underwriting, securities trading, market making and corporate finance advisory. As a result of the same, in the ordinary course of its business, any member of the RHBIB Group, may, from time to time, have business relationships with or hold

positions in the securities (including capital market products) or perform and/or solicit investment, advisory or other services from any of the subject company(ies) covered in this research report. While the RHBIB Group will ensure that there are sufficient information barriers and internal controls in place where necessary, to prevent/manage any conflicts of interest to ensure the independence of this report, investors should also be aware that such conflict of interest may exist in view of the investment banking activities undertaken by the RHBIB Group as mentioned above and should exercise their own judgement before making any investment decisions. Malaysia Save as disclosed below and to the best of our knowledge, RHBIB hereby declares that: 1. RHBIB does not have a financial interest in the securities or other capital

market products of the subject company(ies) covered in this report, save and except for the following: (a) -

2. RHBIB is not a market maker in the securities or capital market products of the

subject company(ies) covered in this report, save and except for the following: (a) -

3. None of RHBIB’s staff or associated person serve as a director or board

member* of the subject company(ies) covered in this report, save and except for the following: (a) - *For the avoidance of doubt, the confirmation is only limited to the staff of research department

4. Save as disclosed below, RHBIB did not receive compensation for investment

banking or corporate finance services from the subject company in the past 12 months, save and except for the following: (a) -

5. RHBIB did not receive compensation or benefit (including gift and special cost

arrangement e.g.company/issuer-sponsored and paid trip) in relation to the production of this report, except for the following: (a) -

Thailand RHB Securities (Thailand) PCL and/or its directors, officers, associates, connected parties and/or employees, may have, or have had, interests and/or commitments in the securities in subject company(ies) mentioned in this report or any securities related thereto. Further, RHB Securities (Thailand) PCL may have, or have had, business relationships with the subject company(ies) mentioned in this report. As a result, investors should exercise their own judgment carefully before making any investment decisions. Indonesia PT RHB Sekuritas Indonesia is not affiliated with the subject company(ies) covered in this report both directly or indirectly as per the definitions of affiliation above. Pursuant to the Capital Market Law (Law Number 8 Year 1995) and the supporting regulations thereof, what constitutes as affiliated parties are as follows: 1. Familial relationship due to marriage or blood up to the second degree, both

horizontally or vertically; 2. Affiliation between parties to the employees, Directors or Commissioners of the

parties concerned; 3. Affiliation between 2 companies whereby one or more member of the Board of

Directors or the Commissioners are the same; 4. Affiliation between the Company and the parties, both directly or indirectly,

controlling or being controlled by the Company; 5. Affiliation between 2 companies which are controlled, directly or indirectly, by

the same party; or 6. Affiliation between the Company and the main Shareholders. PT RHB Sekuritas Indonesia is not an insider as defined in the Capital Market Law and the information contained in this report is not considered as insider information prohibited by law. Insider means: a. a commissioner, director or employee of an Issuer or Public Company; b. a substantial shareholder of an Issuer or Public Company; c. an individual, who because of his position or profession, or because of a

business relationship with an Issuer or Public Company, has access to inside information; and

d. an individual who within the last six months was a Person defined in letters a, b or c, above.

Singapore RHB Securities Singapore Pte Ltd and/or its subsidiaries and/or associated companies do not make a market in any securities covered in this report, except for: (a) - The staff of RHB Securities Singapore Pte Ltd and its subsidiaries and/or its associated companies do not serve on any board or trustee positions of any issuer whose securities are covered in this report, except for: (a) - RHB Securities Singapore Pte Ltd and/or its subsidiaries and/or its associated companies do not have and have not within the last 12 months had any corporate

9

finance advisory relationship with the issuer of the securities covered in this report or any other relationship (including a shareholding of 1% or more in the securities covered in this report) that may create a potential conflict of interest, except for: (a) - Hong Kong The following disclosures relate to relationships between RHBHK and companies covered by Research Department of RHBSHK and referred to in this research report: RHBSHK hereby certifies that no part of RHBSHK analyst compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report. RHBHK had an investment banking services client relationships during the past 12 months with: -. RHBHK has received compensation for investment banking services, during the past 12 months from: -. RHBHK managed/co-managed public offerings, in the past 12 months for: -. On a principal basis. RHBHK has a position of over 1% market capitalization of: -. Additionally, please note the following: Ownership and material conflicts of interest: RHBSHK policy prohibits its analysts and associates reporting to analysts from owning securities of any company covered by the analyst. Analyst as officer or director: RHBSHK policy prohibits its analysts, and associates reporting to analysts from serving as an officer, director, advisory board member or employee of any company covered by the analyst. RHBHK salespeople, traders, and other non-research professionals may provide oral or written market commentary or trading strategies to RHB clients that reflect opinions that are contrary to the opinions expressed in this research report.

KUALA LUMPUR

RHB Investment Bank Bhd Level 3A, Tower One, RHB Centre Jalan Tun Razak Kuala Lumpur 50400 Malaysia Tel : +603 9280 8888 Fax : +603 9200 2216

JAKARTA

PT RHB Sekuritas Indonesia Wisma Mulia, 20th Floor Jl. Jenderal Gatot Subroto No. 42 Jakarta 12710 Indonesia Tel : +6221 2783 0888 Fax :+6221 2783 0777

HONG KONG

RHB Securities Hong Kong Ltd. 12th Floor, World-Wide House 19 Des Voeux Road Central Hong Kong Tel : +852 2525 1118 Fax : +852 2810 0908

BANGKOK

RHB Securities (Thailand) PCL 10th Floor, Sathorn Square Office Tower 98, North Sathorn Road, Silom Bangrak, Bangkok 10500 Thailand Tel: +66 2088 9999 Fax :+66 2088 9799

SINGAPORE

RHB Securities Singapore Pte Ltd. 10 Collyer Quay #09-08 Ocean Financial Centre Singapore 049315 Tel : +65 6533 1818 Fax : +65 6532 6211

Thai Institute of Directors Association (IOD) – Corporate Governance Report Rating 2017

Website: www.thai-iod.com

IOD (IOD Disclaimer)

ผลสาํรวจการกํากบัดแูลกิจการบริษัทจดทะเบียนที่แสดงไว้นี ้ เป็นผลที่ได้จากการสํารวจและประเมินข้อมลูทีบ่ริษัทจดทะเบยีนในตลาดหลกัทรัพย์แหง่ประเทศไทย และ

ตลาดหลกัทรัพย์ เอ็ม เอ ไอ (“บริษัทจดทะเบียน”) เปิดเผยตอ่สาธารณะและเป็นข้อมลูที่ผู้ลงทนุทัว่ไปสามารถเข้าถึงได้ ผลสํารวจดงักลา่วจงึเป็นการนําเสอนข้อมลูในมมุมอง

ของบคุคลภายนอกตอ่มาตรฐานการกํากบัดแูลกิจการของบริษัทจดทะเบยีน โดยไมไ่ด้เป็นการประเมินผลการปฏิบตัิงานหรือการดาํเนินกิจการของบริษัทจดทะเบียนอีกทัง้มิได้

ใช้ข้อมลูภายในของบริษัทจดทะเบยีนในการประเมิน ดงันัน้ผลสํารวจทีแ่สดงนีจ้งึไมไ่ด้เป็นการรับรองถึงผลการปฏิบตัิงานหรือการดาํเนินการของบริษัทจดทะเบียนและไมถื่อ

เป็นการให้คําแนะนําในการลงทนุในหลกัทรัพย์ของบริษัทจดทะเบียนหรือคาํแนะนําใดๆ ผู้ใช้ข้อมลูจงึควรใช้วจิารณญาณของตนเองในการวิเคราะห์และตดัสินใจในการใช้

ข้อมลูใดๆที่เก่ียวกบับริษัทจดทะเบียนที่แสดงในผลสาํรวจนี ้

ทัง้นีบ้ริษัทหลักทรัพย์ อาร์เอชบี (ประเทศไทย) จาํกัด (มหาชน) มิได้ยืนยันหรือรับรองถงึความครบถ้วนและถูกต้องของผลสาํรวจดังกล่าวแต่อย่างใด

http://www.thai-iod.com/

ขอ้มลู Anti-Corruption Progress Indicator 2560 ประกาศเจตนารมณ์ CAC

ได้รับการรับรอง CAC

N/A

Source: Thai Institute of Directors

ขอ้มลูบรษิทัทีเ่ขา้ร่วมโครงการแนวร่วมปฏบิตัขิองภาคเอกชนไทยในการต่อตา้นทุจรติ (Thai CAC) ของสมาคมส่งเสรมิสถาบนักรรมการบรษิทัไทย (ขอ้มลู ณ วนัที ่17 ต.ค.)

• ไดป้ระกาศเจตนารมณ์เขา้ร่วม CAC

• ไดร้บัการรบัรอง CAC

การเปิดเผยการประเมนิดชันีชีว้ดัความคบืหน้าการป้องกนัการมสี่วนเกีย่วขอ้งกบัการทุจรติคอรร์ปัชนั (Anti-Corruption Progress Indicators) ของบรษิทัจดทะเบยีนในตลาดหลกัทรพัย์แห่งประเทศไทยที่

จดัทาํโดยสถาบนัทีเ่กีย่วขอ้งซึง่มกีารเปิดเผยโดยสาํนกังานคณะกรรมการกาํกบัหลกัทรพัยแ์ละตลาดหลกัทรพัยน้ี์เป็นการดาํเนินการตามนโยบายและตามแผนพฒันาความยัง่ยนืสําหรบับรษิทัจดทะเบยีนโดย

ผลการประเมนิดงักล่าว สถาบนัทีเ่กีย่วขอ้งอาศยัขอ้มลูทีไ่ดร้บัจากบรษิทัจดทะเบยีนตามทีบ่รษิทัจดทะเบยีนไดร้ะบุในแบบแสดงขอ้มลูเพื่อการประเมนิ Anti-Corruption ซึง่อา้งองิขอ้มลูมาจากแบบแสดง

รายงานขอ้มลูประจาํปี แบบ (56-1) รายงานประจาํปีแบบ (56-2) หรอืในเอกสารหรอืรายงานอื่นทีเ่กีย่วขอ้งซึง่เป็นบุคคลภายนอก โดยมไิดเ้ป็นการประเมนิการปฏบิตัขิองบรษิทัจดทะเบยีนในตลาดหลกัทรพัย์

แห่งประเทศไทยและมไิดใ้ชข้อ้มูลภายในเพื่อการประเมนิ เนื่องจากผลการประเมนิดงักล่าวเป็นเพยีงผลการประเมนิ ณ วนัที่ ปรากฏในผลการประเมนิเท่านัน้ ดงันัน้ผลการประเมนิจงึอาจเปลีย่นแปลงได้

ภายหลงัวนัดงักล่าว หรอืรบัรองความถกูตอ้งครบถว้นของผลประเมนิดงักล่าวแต่อย่างใด

Documents

Thailand Sector Update - RHB TradeSmart · 5/9/2018 · improvement from February, which encountered the 2018 Lunar New Year high base effect. Consequently, 1Q19 ’stotal arrivals