Central Plaza Hotel: Firm recovery, as promised
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- 3Q25F core profit expected in at THB148mn (-16% y/y but +42% q/q)
- Hotel performance still weighed down by losses from new Maldives assets (albeit lesser q/q) while RevPAR growth in Thailand and Japan remained solid
- Food performance expected to show an improving trend with JV profit contribution continuing to be a key driver
- Maintain BUY; unchanged DCF-based TP of THB37.00
3Q25F performance to show firm recovery q/q
Earnings preview
3Q25F core profit growth to show firm recovery q/q. We estimate CENTEL to post a 3Q25F core profit of THB148mn (-16% y/y,+42% q/q). A strong recovery in q/q performance would mainly be supported by lower losses from the new Maldives hotels – a potential decline of c.USD1mn from 2Q25 – as well as stronger contribution of associate income from food JV.
On a y/y basis, performance was still weighed down by losses and higher interest expenses after operations of new two Maldives hotels commenced in November 2024 and April 2025 – despite resilient hotel performance in Thailand and strong performance of hotel in Japan and food business.
We forecast the company would incur extra items, consisting of a THB56mn impairment loss from the ceased operations of Amazon Café in Vietnam (40%-owned JV) and a THB40mn gain from forex. Net-net, 3Q25F profit is expected to come in at THB132mn (-19% y/y, +20% q/q).
Group RevPAR growth positive in 3Q25. Management shared that overall RevPAR growth (excluding Dubai) was 5% – improved vs. 2% in 2Q25. The stronger RevPAR growth was supported by stronger performances in Thailand and the Maldives, despite softer Japan RevPAR growth.
Bangkok properties continued to show contractions for AOR (-3ppts y/y) following a weak inbound tourist number. In contrast, upcountry assets in Thailand continued to perform well with RevPAR growth of 12% (driven mostly by a spike in AOR), supported by the completion of major renovation projects such as Centara Grand Mirage in Pattaya and Centara Karon despite the renovation of Centara Grand Huahin (from April 2025) and Centara Grand Krabi (from May 2025). Overall, Thailand RevPAR remained positive at 5%.
The hotel in Japan showed only a decent RevPAR growth of 8% in 3Q25 after accelerated growth in August and September 2025 – despite the weak performance in July stemming from fears over earthquakes and volcano eruptions. We note that in JPY terms, we still expect double-digit RevPAR growth from the Japan asset.
The Maldives hotels still delivered a 27% RevPAR contraction this quarter; however, it improved from 2Q25’s 46% RevPAR contraction. The drop in the Maldives performance was further weighed down by the launch of a new hotel in November 2024 (Centara Mirage Lagoon Maldives) and another new hotel in April 2025 (Centara Grand Lagoon Maldives).
Additionally, CENTEL's Dubai assets, which are accounted for via associate income, showed flattish RevPAR growth – the decrease in AOR was offset by higher ARR. Dubai performance was also weighed down by the strong THB. Stripping out currency impact, however, RevPAR growth should remain positive.
Overall, we estimate hotel revenue to grow 6% y/y, mostly in line with the group RevPAR growth at 5% in 3Q25F.
Food revenue trend improved. Total food revenue is expected to post a mild growth of 1% in line with SSSG of 1% (vs. -3% in 2Q25). The resilient SSSG was mainly supported by firm growth in Japanese restaurant brands such as Ootoya and Katsuya.
Meanwhile, if including JV brands, food revenue should grow 9% y/y with an SSSG of 2%, driven by the Shinkansen brand under JV. The strong performance of food JVs supported associate income growth in 3Q25F.
EBITDA margin improving from a spike in associate income. In 3Q25F, we estimate overall EBITDA margin to improve 90bps y/y and 130bps q/q. This was primarily driven by higher ADR and a profit contribution spike in associate income from food JVs. Nonetheless, the increase in D&A (+8% y/y) from new Maldives hotels should lead to a y/y decline in consolidated EBIT margin.
Core net margin to contract y/y on higher finance costs. CENTEL’s finance costs are expected to rise 16% y/y in 3Q25F – mostly on the full recognition of additional interest expenses of new Maldives hotels – despite the declining interest rate environment. Net-net, 3Q25F core margin should come in at 2.7% (-60bps y/y).
Outlook
Further improvement expected in 4Q25F. We note that according to the government’s data, the y/y contraction in monthly inbound tourist arrivals has narrowed since August – which the monthly Chinese tourist number also contracting less y/y since the bottom in March 2025.
Management notes that BKK RevPAR has shown strong recovery based on 4Q25’s on-the-book figures, with high-single-digit RevPAR growth. Upcountry RevPAR growth may normalise but remain positive.
Maldives assets have also showed improvement, especially the older assets (RevPAR turned positive) following the company’s new strategy and new airport terminal in Maldives. The two new assets in Maldives are also expected to see the improvement of AOR which could help lessen y/y RevPAR contraction in 4Q25.
Japan RevPAR in JPY terms continued to show robust double-digit RevPAR growth. Dubai assets also showed h7%-8% RevPAR growth based on on-the-book data. Nonetheless, both assets’ performances would continue to be weighed down by the strong THB against local currency.
Local stimulus measures to boost domestic travelling demand in 4Q25. The government recently approved new tax measures to support tourism, implemented 29 October-15 December 2025. Individual taxpayers can deduct hotel accommodation expenses, homestays, or non-hotel accommodation, as well as restaurant service fees paid to VAT-registered businesses, up to a maximum of THB20,000.
This is divided into the first THB10,000, which can be deducted using a full paper or electronic tax invoice, and the remaining THB10,000, which must be deducted using an electronic tax invoice (e-Tax Invoice) only.
The tourism deduction rate in 55 secondary tourist provinces and some districts in 15 provinces is reduced by 1.5x, while other provinces have a deduction rate of 1x. It is estimated that approximately 140,000 people will join this scheme, with a total value of THB2,800mn.
Nonetheless, based on discussions with management, we believe contribution from this scheme might not be substantial; however, it could urge more demand of overall domestic tourism. CENTEL shared that the domestic boost scheme in 3Q25 only contributed c. THB27mn hotel revenue to CENTEL.
Tax deductible scheme from capex. Meanwhile, the government is also proposing tax measures to support the improvement of accommodation facilities, with an implementation period of 29 October 2025-31 March 2026, which would allow companies or partnerships engaged in hotel operations to deduct twice the expenses incurred for additions, alterations, expansions, or improvements to assets related to the business (excluding repairs to maintain the original condition).
CENTEL is currently renovating and upgrading its two key assets which are Centara Grand Krabi and Centara Grand Hua Hin from 2024 to early-2027. Thus, the company might be able to benefit from this tax-deductible scheme if its capex is applicable. The rough capexes for Centara Grand Krabi and Centara Grand Hua Hin are c.THB1.4bn and c.THB2.4bn, respectively.
Recommendation
Maintain BUY with an unchanged TP of THB37.00 (WACC of 8.9%, terminal growth of 1%). Given upside potential and assuming that the Maldives’ performance bottomed in 2Q25, we maintain BUY.
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