[ET Net News Agency, 25 January 2018] BofA Merrill Lynch reinstated coverage of
Shangri-La Asia (SLA)(00069) with a "buy" rating and price target of HK$25.
SLA is a high-end international hotel operator with majority of the assets selfowned.
Hotel operations contribute 77% of earnings with the rest mainly from China property
rental.
The research house forecast EBITDA CAGR of 14% in 2016-2019 driven by: (i) multi-year
industry RevPAR recovery; (ii) ramp-up of new and renovated hotels; (iii) and potential
cost savings.
BofAML has not factored in any upside from asset disposals or its potential from
leveraging their brands to develop its asset-lite model. (KL)