International tourist arrivals to Thailand in the first nine months of FY17 rose 5.4% y-y to 26mn. The increase is expected to continue toward the full-year target of 6% y-y to34.4mn as the number of tourists from China’ Europe and Russia has returned to normal levels, which would boost the y-y growth of domestic hotel business. (positive to ERW).

The fierce price competition among hotel operators in Maldives continues to put a lid on RevPar which has not yet recovered (negative to CENTEL), bucking the trend of positive RevPar growth in other regions (positive to MINT). Food and restaurant businesses start to show signs of recovery as SSSG in restaurants with similar style (MK Suki and Yayoi) swung back to positive growth in 3QFY17 after consumers seemed to have adjusted themselves in the face of the mourning and royal cremation for the late king.

In our view, the above growth momentum will accelerate at year-end and be in full swing in 1QFY18. As things stand, we recommend an ‘OVERWEIGHT’ position in the tourism sector. MINT is our top because both its hotel and restaurant services businesses have positive growth prospects and the current share price is at a laggard to its peers.