KCS pushes tourism stocks for holiday

Krungsri Capital Securities (KCS) recommends investing in tourism stocks, including hotels and airlines, as a large number of Chinese tourists are expected to flock to Thailand during Golden Week, which runs through next Monday.
According to travel data firm ForwardKeys, the number of flight bookings from China to Thailand during the seven-day holiday increased by 250% year-on-year.
Roughly 183,000 Chinese visitors are expected to visit Thailand during this year’s Golden Week holiday, accounting for 88% of the level in 2019.
ForwardKeys said Bangkok ranks fifth among travel destinations in Asia for Chinese during the holiday.
“The wealth of the Chinese should increase their spending and travel during Golden Week, as the stock market in the mainland has surged by 16.7% since Sept 20, while the Hong Kong bourse gained 15.3% since the Chinese government launched fiscal and monetary stimulus measures early last week,” KCS said in a research note.
KCS recommends investors focus on airport stocks, such as Airports of Thailand (AOT), as well as airline stocks, namely Asia Aviation (AAV) and Bangkok Airways (BA).
For hotels, the brokerage picks Erawan Group (ERW) and Minor International (MINT), while Siam Wellness Group (SPA) is selected for the service sector.
Yuanta Securities said the fourth quarter is generally the high season for tourism. The Tourism Authority of Thailand is planning to stimulate tourism in the final three months with special privileges and souvenirs for tourists from October to December, while accompanying Thai firms to tourism expos in several countries.
China’s stimulus measures are expected to have a positive impact on the Thai tourism sector, with Chinese visitors comprising 28% of foreign arrivals pre-Covid, recovering to 60-70% of the 2019 level.
Foreign tourist arrivals in the last three months of 2024 are estimated at 10 million, up 17% quarter-on-quarter and 24% year-on-year.
According to data from airports, airlines and hotel operators, forward bookings are strong and should have a good growth trend compared with the previous year, KCS noted.
The fourth-quarter profit of stocks in the tourism sector is expected to grow on a quarterly and annualised basis, with MINT the only exception because of seasonal factors in Europe, said the brokerage.