2HFY17 recovery looks favorable:

Even though CENTEL’s operating results came in flat in 1HFY17, we are more optimistic about a recovery in its 2HFY17 performance as (i) RevPar of Maldives hotels continues to contract but at a slower pace and it is offset by performance in domestic hotel operations that has started to recover since 1QFY17 and is expected to show a significant improvement in 4QFY17, which marks the high season for the business, due to the lowbase effect in the same‐year‐ago period and the absence of external negative factors (the ‘zero‐dollar tour’ crackdown and the mourning period for the late king), and (ii) its food business in 3QFY17 tends to hold steady in q‐q terms and will show a strong recovery in 4QFY17 in which consumption is likely to return to normal and the likelihood of the government’s economic stimulus measures will also help boost CENTEL’s businesses. We estimate FY17 net profit to grow 9% y‐y.