The Daily Pulse of Bursa Malaysia

Shangri-La Hotels takes centrestage in Malaysia and Hong Kong

Publish date: Mon, 15 Apr 2024, 08:58 AM
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Shangri-La Hotels (Malaysia) Bhd is looking strong in terms of share price movement. The counter has already charted a bullish breakout on high trading volume. At the current level, the counter is trading above its net asset value of RM1.81 as at Dec 31, 2023.

But the counter is deemed as undervalued given that Shangri-La Malaysia has five hotels and some landbank, which are sitting at book value. Even if the hospitality group fully writes down its loss-making Myanmar associate, it is still commanding good valuations.

Shangri-La Malaysia’s share of losses from its associated companies in Myanmar rose to RM17.7 million from RM4.5 million in 2022, mainly attributable to the higher fair value losses arising from the year-end revaluation of Sule Square and Shangri-La Serviced Apartments in Yangon.

The Group's unrecognised share of losses for FY23 in Traders Yangon Company Ltd (TYCL) in which it has a 23.5% shareholding amounted to RM8.852 million. TYCL owns and operates Sule Shangri-La Yangon, the Group's associate hotel.

Notably, Hong Kong listed Shangri-La Asia Ltd has also been going on an uptrend recently. There are speculations of Shangri-La Malaysia being taken private and this will benefit Shangri-La Hong Kong.

The hotel operator has chalked in good operating profit with strong operating cash inflow. Investors are also happy the company declared a 7 sen per share dividend in FY23 from no dividends in the previous year. More so because it was still loss-making in FY22.

Shangri-La Malaysia managed to return to the black with a net profit of RM16 million from a net loss of RM40.7 million in the previous year. Its revenue rose to RM503.7 million in FY23 from RM363.4 million in FY22.

With the improving tourist arrivals in the countries Shangri-La Malaysia is present, its financial performance stands to show much better growth moving forward.

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