Thursday 16 March 2023

Thoughts on Miramar Hotel (Hkex: 00071)

 Miramar Hotel (Hkex: 00071) released its results tonight.

Personally i am not as concerned about the results due to the large discount and cash position the company has.
Nevertheless, the results are positive as hotels and F&B Operations saw a turnaround to profit in 2H 2022 while travel agency operations saw reduced losses.


(Full Year 2022)

Current Share Price of 11.70 HKD makes no sense as the Cash- All Liabilities equate to 6.12 HKD per share.
Assuming a bad case scenario where the 2nd Half of the year situation persist which we know is unlikely due to reopening of HK and Revenge Travel, full year should come at 92 cents as 2H underlying earnings is 46 cents.
However, if we were to backtrack to 2019 before covid, the core earnings came at $1.13.
Therefore, the business which includes hotel, rental property income from shopping mall , F&B in hotels as well as travel agency (which has 100k likes on the facebook page) trading at around 6-7 PE based on 2022 2H earnings does not make sense.

Once again, share price looks funny again as the stock trades at a low range when its underlying earnings have shown signs of recovery.
If one says that share price is expectations of earnings ahead (which i am definitely not one of those that believe in that 100%), the company is showing covid valuations or a company that does covid swab sticks or mask because its share price is on the low side.
With HK Opening up happening in Jan/Feb 2023 only, i believe more is to come. Even if the already low expectations are not fufilled, the strong balance sheet more than makes up the buffer.
Underlying Earnings
2019: 1.13 HKD
2020 : 0.66 HKD
2021 : 0.61 HKD
2022 : 0.76 HKD
The slight worry might be the steady property rental of office and shopping mall might come down as it has shown a slight decline from 2021 to 2022. However, it remains relatively stable and recent rentals have shown stability as well. The broad forecast is for rental in malls to show 0 to 5% this year.

With that i end off by saying usually the higher frequency in posting means that i am jetting off. Which i am

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