UBS Equities-APAC Focus Asia Tourism -Identifying the tourism winners-此为英文文档

ab

GlobalResearchandEvidenceLab9May2024

AsiaTourism

APACFocus:Identifyingthetourismwinners

TourismdemandinAsiahasexperiencedarapidbutunevenrecovery.WethinkfuturegrowthislikelytobedrivenbyimprovingtourismcompetitivenessandhighernumbersofChinesevisitors.Inthisreportweintroduceatourismcompetitivenessscorecardfor14destinationsandoverlayouranalysiswithUBSEvidenceLab'sChinaOutboundTravelConsumerSurvey(>AccessDataset).Singapore,Japan,Malaysia,thePhilippines,ThailandandKoreaallstandout,andbarringJapanwedonotthinkthemarkethasfullypricedinthepotentialtourismgrowthinthesedestinations.Wehighlightsixhigh-convictionBuy-ratedstocksonthistheme:CPAll(UBSKeyCall),GENS,MAHB,SATS,BloomberryandGKL.

Rapidbutuneventourismdemandrecoverysofar

TourismdemandhasrecoveredrapidlyinAsiaoverthepast12-18months.ExcludingChinaandIndiaasdestinations,visitorarrivalsinAsiainQ423exceeded80%of2019levels,upfrom35%inQ422.ThestrengthoftourismdemandisalsoreflectedinhigherpervisitorspendingacrossAsia,up16%inthelatestreportedquarteronalocalFXbasiscomparedto2019.However,therecoveryoftourismdemandhasbeenunevensofaracrossAsiandestinations,withvaryingvisitorarrivalandpervisitorspendrecoveryrates.

IdentifyingAsiandestinationswithoutgrowthpotential

Weexpecttourismdemandgrowthtoremainuneven,anddestinationswithimprovedtourismcompetitivenesstogainvisitationshare.Also,asoutboundChinesedemandrecoveryaccelerates,destinationspreferredbyChinesetouristscouldfarebetter.OurnewUBStourismscorecardcomprises10factorsacrossfivepillars,includingeaseofentry,tourismassetoffering,connectivityandcostcompetitiveness.BasedonthesescoresandUBSEvidenceLab'sChinaOutboundTravelConsumerSurvey(>AccessDataset),Singapore,Japan,Malaysia,thePhilippines,ThailandandKoreastandout.Wethinkthemarkethasnotfullypricedinthepotentialoutperformanceoftourismgrowthinthesedestinations,exceptinJapanwheretravel-relatedstocksaretradingat+1SDabovetheirhistoricalaverageonaforwardPEbasis.

Figure1:Wehighlightsixhigh-convictionBuy-ratedstockscentredonthistheme

Equities

Asia

LeisureGoods&Services

AngusChan

Analyst

angus.chan@+852-29717530

PerryYeung

Analyst

perry.yeung@+852-29716349

RyanLau

AssociateAnalystryan-za.lau@+852-29717954

AlexManoonpol

Analyst

alex.manoonpol@+662-6135770

AmandaFoo

Analyst

amanda.foo@+603-27811187

MelissaLeong

Analyst

melissa.leong@+65-64956773

JiWooHong

Analyst

jiwoo.hong@+82-2-37028807

BBGTicker

CompanyName

UBSRating

MarketCap(US$bn)

30D

ADVT(US$m)

Share

Price

(LOC/sh)

Price

Target

(LOC/sh)

Uspside/

Downside

(%)

SharePrice

vsQ419

average%

2024ENet

Income(as

%ofpre-

Covid)

2024EP/E

(x)

2025EP/E

(x)

2024EP/B

(x)

2025EP/B

(x)

2024E

DividendYield(%)

2025E

DividendYield(%)

2023-25E

EPS

CAGR

(%)

CPALLTB

CPAll

Buy

14.0

48.4

57.50

74.00

29%

-26%

100%

23.319.14.23.71.8%

2.1%

22%

GENSSP

GentingSingapore

Buy

7.7

24.6

0.88

1.04

19%

-6%

100%

15.014.31.31.24.6%

4.6%

8%

MAHBMK

MalaysiaAirportsHoldings

Buy

3.6

10.7

10.26

11.20

9%

25%

172%

22.819.12.42.33.3%

3.9%

36%

SATSSP

SATS

Buy

2.8

5.7

2.57

3.00

17%

-46%

73%

27.919.73.12.81.3%

2.0%

123%

BLOOMPM

BloomberryResorts

Buy

2.0

0.9

10.34

14.70

42%

-5%

78%

14.77.82.01.70.0%

2.6%

25%

114090KS

GrandKoreaLeisure

Buy

0.6

2.3

13,690

17,500

28%

-34%

91%

12.88.71.91.64.4%

6.4%

49%

Average

-15%

102%

19.414.82.52.22.5%

3.6%

44%

Source:Datastream,UBSestimates.Note:Pricedasof8May2024;valuationdataderivedoncalendarisedbasis

ThisreporthasbeenpreparedbyUBSSecuritiesAsiaLimited.ANALYSTCERTIFICATIONANDREQUIREDDISCLOSURES,includinginformationontheQuantitativeResearchReviewpublishedbyUBS,beginonpage16.UBSdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.

AsiaTourism

UBSResearch

AsiaTourism9May2024ab3

Unevenoutcomefromthestrengthoftourismrecovery

TourismdemandinAsiahasexperiencedarapidbutunevenrecovery.Togaugethe

disparityinperformance,wehavecreatedatourismcompetitivenessscorecardto

compareandassessthechangeinrankingbykeydestinationacross10relevantfactors

andcomparewith2019.Wethinkdestinationswithimprovedtourismcompetitiveness

arelikelytogainvisitorshareattheexpenseofthosewithdeterioratedcompetitiveness.

Also,withChinesetourismlikelytobecomeamoresignificantsourceofincremental

visitationtraffic,marketsthatarepreferredbyoutboundChinesetouristscouldfare

better.Ontheflipside,destinationswithhighervisitationrecoveryfromoutbound

Chinesetourismcouldbeexposedtotheriskoftrafficdiversion.Basedonourscorecard

andUBSEvidenceLab'sChinaOutboundTravelConsumerSurvey,Singapore,Japan,

Malaysia,thePhilippines,ThailandandKoreastandout,eitherwiththeirimproved

tourismcompetitivenessorasapreferredChinesetouristdestination.Ontheother

hand,Indonesia,CambodiaandHongKong(HK)maybepositionedunfavourably.

Figure2:Favourablyandunfavourablypositioneddestinations,basedonour

UBStourismscorecardandUBSEvidenceLabdata

Favorablypositioned

Unfavorablypositioned

Marketwithimproved

tourism

competitiveness

Markettopotentially

benefitfromoutbound

Chinesetraffic

Marketwith

deterioratedtourism

competitiveness

Marketsubjectto

diversionriskof

outboundChinese

traffic

SingaporeSingapore

IndonesiaHK

JapanJapan

CambodiaMacau

MalaysiaKorea

Philippines

Thailand

Korea

HK

Source:UBSestimates.Note:Bolddestinationsindicatefavourablypositioneddestinationswithtourism-related

stocksintherespectivedestinationtradingbelowtheirhistoricalaverage

Rapidbutunevenrecoveryoftourismdemandsofar

FollowingtheremovalofCOVIDrestrictions,Asiandestinations'inboundtourism

demandhasrecoveredrapidly.ExcludingChinaandIndiaasdestinations,visitorarrivals

inAsiainQ423exceeded80%of2019levels,upfrom35%inQ422.(1)Thestrengthof

tourismdemandinAsiacouldbereflectedinhigherpervisitorspend.ExcludingChina

andIndia,pervisitorspendinAsiawasaroundUS$1,100,onparwithpre-COVIDlevels,

despitesignificantUSdollarappreciationagainstmostAsiancurrencies.Onalocal

currencybasis,inboundtouristreceiptspervisitorare16%above2019levelsinthe

latestreportedquarteronaverageacrossAsiandestinations.(2)

However,therecoveryoftourismdemandhasbeenunevensofar.Insomedestinations

suchasJapanandVietnam,visitorarrivalsinQ124alreadyexceededpre-pandemic

levelswithverystrongmomentum,whileotherdestinations'visitorarrivalgrowthwas

weak(eg,HKandIndonesia)despitevisitationtracking20-30%belowpre-COVID

levels.Similarly,pervisitorspendvariesbydestination.Inlocalcurrencyterms,Japan,

SingaporeandthePhilippinesrecordedsignificantlyhigherpervisitorspendversus2019

whileinThailandandCambodiaitisbelowpre-COVIDlevels.

1.

2.

InaggregatingvisitorarrivalstoAsia,weexcludeChinaandIndiaduetodataavailability.OuraggregatevisitorarrivalstoAsiaencompassesthefollowingdestinations:Cambodia,HK,Indonesia,Japan,Korea,Macau,Malaysia,Philippines,Singapore,Taiwan,ThailandandVietnam.

CambodiaandThailand:Q323datapointsused.Otherwise,latestreportedquarterreferstoQ423.

WeexpectfurthervisitorgrowthupsideforAsiandestinationsasreturningChinese

touristsmayaddincrementaldemandtothecurrentmomentum.Chinesevisitors

accountedformorethan40%oftotalvisitationinAsiain2019andhasonlyrecovered

toaround60%of2019levels(excludingIndia)sofar.HKandMacaurecordedthe

strongestrecoveryofvisitationtrafficfrommainlandChinainQ124(around60-90%of

2019levels),likelyduetotheirproximityandeaseofentry.Excludingthesetwo

destinations,theoutboundChinesetrafficrecoveryratedropstoaround40%of2019

levels.Webelievedestinationswithimprovedtourismcompetitivenesswouldbewell

positionedoffalowbasetocapturethedemandfrommainlandChina.

Figure3:Ex-India/Chinaasdestinations,totalvisitorarrivaltoAsiareached81%ofpre-COVIDlevelsinQ423

50,000

45,000

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

Q115

Q315

Q116

Q316

Q117

Q317

Q118

Q318

Q119

Q319

Q120

Q320

Q121

Q321

Q122

Q322

Q123

Q323

VisitorarrivalofAsiaexMainlandChinaandIndia

Numberofnon-ChinesetouriststoAsia('000,LHS)as%ofpre-Covid(%,RHS)

120%100%80%60%40%20%0%

Source:CEIC.Note:Inderivingthevisitationrecoveryrate,wetaketheavg.quarterlyvisitorarrivalsin2019

Figure5:DespitesignificantUS$appreciationvsmostAsiancurrencies,pervisitorspendbroadlyonparvs2019

1,400

1,200

1,000

800

600

400

200

0

Q115

Q215

Q315

Q415

Q116

Q216

Q316

Q416

Q117

Q217

Q317

Q417

Q118

Q218

Q318

Q418

Q119

Q219

Q319

Q419

Q123

Q223

Q323

TourismtrendofAsiaexChinaandIndia

46

44

42

40

38

36

34

32

30

PerVisitorSpend(US$/visitor,LHS)Numberoftourist(m,RHS)

Source:CEIC,UNCTAD

Figure4:Forsomedestinations,improvingvisitormomentumremainsstrongdespitehighrecoveryrates

VisitorarrivalQoQ(%)

30%

Vietnam

Taiwan

Singapore

25%

Highrecoveryratein

visitationwithstillstrong

Philippines

20%

QoQmomentum

Thailand

15%

Japan

AsiaexChinaandIndia

HK

10%

MalaysiaMacau

5%

Korea

Cambodia

0%

Indonesia

-5%

70%80%90%100%110%Visitorarrivalrecoveryrate(%of2019)

Source:CEIC.Note:Inderivingthevisitationrecoveryrate,wetaketheavg.quarterlyvisitorarrivalsin2019;forHKweuseavg.quarterlyvisitorarrivalsforQ318-Q219;Q423datapointsusedforTaiwanasQ124datapointsareunavailable

Figure6:Onalocalcurrencybasis,avg.pervisitorspendinlatestreportedquarterwas16%above2019levels

PerVisitorspendinLocalFX(As%ofpre-Covidlevel)

200%

180%

160%

140%

120%

100%

80%

n

Philippi

nes

Singapor

e

Japa

Ind

onesia

M

alaysia

HK

Taiwan

Macau

Thailand

KoreCambodia

a

Vietnam

60%70%80%90%100%

Visitationrecoveryrate(as%ofpre-Covid)

Source:CEIC,UNCTAD.Note:Pre-COVIDleveldefinedasthequarterlyavg.in2019;forHKweusethequarterlyavg.forQ318-Q219

AsiaTourism9May2024ab4

Figure7:Importantly,therecoveryofChinesetouristdemandremainsmutedsofar

Figure8:Chinesetouristsaccountedforaround30%oftotalvisitationin2023vsaround40%in2019

AsiaTourism9May2024ab5

HK

Macau

Asia

&

exChina

India

Korea

Vietnam

Thailand

Cambodia

Singapore

Japan

Malaysia

Indonesia

Philippines

Taiwan

Japan

Singapore

Macau

Thailand

HongKong

SouthKorea

Malaysia

MainlandChina

Vietnam

Taiwan

India

Indonesia

Philippines

Cambodia

0.800.700.600.500.400.300.200.10

0.00

0.680.68

0.64

0.62

0.57

0.54

0.50

0.48

0.430.420.41

0.33

0.25

0.23

10%8%6%4%2%0%-2%-4%-6%-8%

-10%

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

Q115

Q315

Q116

Q316

Q117

Q317

Q118

Q318

Q119

Q319

Q120

Q320

Q121

Q321

Q122

Q322

Q123

Q323

ChineseVisitorarrivalofAsiaexMainlandChinaandIndia

NumberofChinesetouriststoAsia('000,LHS)as%ofpre-Covid(%,RHS)

70%60%50%40%30%20%10%

0%

Source:CEIC.Note:Inderivingthevisitationrecoveryrate,wetaketheavg.quarterlyvisitorarrivalsin2019

Chinesetouristsas%oftotalvisitation%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

2023

2019

Source:CEIC

Destinationswithimprovedcompetitivenesscouldgainvisitationshare

WhilewethinkthestrengthoftourismdemandtoAsiacouldsustain,weexpect

demandgrowthtoconcentratearounddestinationswithimprovedtourism

competitivenessandwhichcouldpotentiallygainvisitationsharefromdestinationswith

thebiggestdeclinesincompetitiveness.Inordertoquantifythetourismcompetitiveness

ofeachdestination,weintroduceourUBStourismcompetitivenesscompositescore,a

weightedaveragepercentilerankof14Asiandestinationsacross10pillarsofmetrics

(detailedinbothFigure19andtheAppendix),gauging:1)easeofentry,2)costof

consumption,3)tourismassetoffering,4)transportconnectivity,5)hygiene&safety.

OverlayingthechangeinUBStourismcompetitivenesscompositescoresbetween2015-

19andthegrowthinvisitorarrivalsduringthesameperiod,thecorrelationappears

reasonablystrongat44%.

Onanabsolutebasis,Japan,Singapore,Macau,ThailandandHKappearthemost

competitivedestinations,basedonourscorecard.However,Japan,Singapore,Malaysia,

thePhilippines,ThailandandKoreaexhibitedthebiggestimprovementintourism

competitivenessover2019-23,whiletourismcompetitivenessinCambodia,Indonesia

andHKhassomewhatdeteriorated.Comparedwithpre-COVIDlevels,Japanhashad

thebiggestincreaseintermsofvisitationshareinAsia,whileHKhashadthebiggest

decline.

Figure9:Singapore,Macau,Japan,Thailand,HKamongthemostattractivetouristsdestinationsonabsolutebasis,perourindex…

UBStourismcompetitivenesscompositescore

Mostcompetitivedestinationsonabsolutebasis

20192023

Source:CEIC,UNWTO,DIIOMI,IMF,BloomConsulting,AECOM,WorldAssociateofZooandAquariums,Michelin,WorldBank,Unicef,UBSestimates

Figure10:…whileSingapore,Japan,Malaysia,Philippines,Koreashowthebiggestimprovementvs2019

ChangeinUBStourismcompetitivenesscompositescore

(2023vs2019)

9%

6%

5%

5%

3%

2%2%

0%

Deterioratedtourism

competitiveness

Improvedtourismcompetitiveness

India

-1%-2%

-3%

-5%

Cambodia

-9%

Singapore

Japan

Malaysia

Philippines

Thailand

SouthKorea

Vietnam

Macau

MainlandChina

Taiwan

HongKong

Indonesia

-9%

Source:CEIC,UNWTO,DIIOMI,IMF,BloomConsulting,AECOM,WorldAssociateofZooandAquariums,Michelin,WorldBank,Unicef,UBSestimates

AsiaTourism9May2024ab6

Figure11:OurscorecardmeasuresthetourismcompetitivenessofeachAsiandestination—Japan,Singapore,Malaysia,Korea,thePhilippineshaveimprovedthemost

PercentileScore

Easeofentry(10%)

Costofconsumption

(10%)

TourismAsset(40%)

Transportconnectivity(20%)

Hygieneandsafety(20%)

UBSTourism

CompetitivenessCompositeScore

VisaOpennessIndex

Pricelevelratio

Cultural&entertainmenttourismdemand

No.ofentertainmentfacilities

Michelinrestaurantsdensity

Hoteldensity

No.ofoperatingairlines

Railroaddensity

Peacefulnessand

politicalstabilityindex

Populationwith

improvedsanitation

facilities

20192023Δ

20192023Δ

20192023Δ

20192023Δ

20192023Δ

20192022Δ

20192023Δ

20192021Δ

20192023Δ

20192022Δ

20192023Δ

MainlandChina

0.00

0.00

0%

0.39

0.39

0%

0.77

0.46

-31%

1.00

1.00

0%

0.31

0.38

8%

0.08

0.08

0%

1.00

1.00

0%

0.46

0.46

0%

0.23

0.23

0%

0.38

0.54

15%

0.49

0.48

-1%

Japan

0.08

0.15

8%

0.00

0.15

15%

0.85

1.00

15%

0.85

0.85

0%

0.77

0.69

-8%

0.77

0.77

0%

0.85

0.85

0%

0.77

0.77

0%

0.85

0.92

8%

0.62

0.62

0%

0.64

0.68

4%

HongKong

0.77

0.69

-8%

0.08

0.00

-8%

1.00

0.92

-8%

0.15

0.15

0%

0.92

0.85

-8%

0.92

0.92

0%

0.62

0.54

-8%

0.85

0.85

0%

0.31

0.54

23%

0.46

0.38

-8%

0.60

0.57

-3%

Macau

0.92

1.00

8%

0.23

0.23

0%

0.38

0.31

-8%

0.92

0.92

0%

1.00

1.00

0%

1.00

1.00

0%

0.00

0.00

0%

1.00

1.00

0%

0.92

0.85

-8%

0.62

0.62

0%

0.65

0.64

-1%

SouthKorea

0.23

0.08

-15%

0.15

0.31

15%

0.46

0.69

23%

0.77

0.77

0%

0.62

0.62

0%

0.46

0.46

0%

0.69

0.62

-8%

0.62

0.62

0%

0.62

0.62

0%

0.62

0.62

0%

0.53

0.54

1%

Singapore

0.46

0.85

39%

0.31

0.08

-23%

0.69

0.77

8%

0.23

0.23

0%

0.85

0.92

8%

0.85

0.85

0%

0.54

0.69

15%

0.92

0.92

0%

1.00

1.00

0%

0.62

0.62

0%

0.63

0.68

5%

Malaysia

0.69

0.92

23%

0.62

0.62

0%

0.54

0.54

0%

0.23

0.23

0%

0.38

0.46

8%

0.31

0.23

-8%

0.38

0.38

0%

0.23

0.23

0%

0.69

0.69

0%

0.62

0.62

0%

0.48

0.50

2%

Thailand

0.62

0.62

0%

0.54

0.77

23%

0.92

0.85

-8%

0.62

0.62

0%

0.54

0.54

0%

0.54

0.54

0%

0.92

0.92

0%

0.31

0.31

0%

0.15

0.15

0%

0.62

0.62

0%

0.61

0.62

2%

India

0.31

0.31

0%

1.00

1.00

0%

0.62

0.62

0%

0.69

0.69

0%

0.00

0.00

0%

0.00

0.00

0%

0.77

0.77

0%

0.54

0.54

0%

0.00

0.00

0%

0.08

0.08

0%

0.41

0.41

0%

Taiwan

0.15

0.23

8%

0.46

0.46

0%

0.23

0.23

0%

0.08

0.08

0%

0.69

0.77

8%

0.69

0.62

-8%

0.31

0.23

-8%

0.69

0.69

0%

0.77

0.77

0%

0.46

0.38

-8%

0.43

0.42

-1%

Indonesia

1.00

0.54

-46%

0.85

0.85

0%

0.31

0.38

8%

0.23

0.23

0%

0.00

0.00

0%

0.23

0.15

-8%

0.15

0.31

15%

0.15

0.15

0%

0.46

0.31

-15%

0.23

0.31

8%

0.36

0.33

-3%

Vietnam

0.31

0.38

8%

0.92

0.92

0%

0.15

0.08

-8%

0.23

0.46

23%

0.46

0.31

-15%

0.62

0.69

8%

0.46

0.46

0%

0.38

0.38

0%

0.54

0.46

-8%

0.15

0.15

0%

0.43

0.43

1%

Philippines

0.54

0.46

-8%

0.69

0.54

-15%

0.08

0.15

8%

0.23

0.46

23%

0.00

0.00

0%

0.15

0.38

23%

0.23

0.15

-8%

0.00

0.00

0%

0.08

0.08

0%

0.31

0.23

-8%

0.24

0.25

1%

Cambodia

0.85

0.77

-8%

0.77

0.69

-8%

0.00

0.00

0%

0.00

0.00

0%

0.00

0.00

0%

0.38

0.31

-8%

0.08

0.08

0%

0.08

0.08

0%

0.38

0.38

0%

0.00

0.00

0%

0.25

0.23

-2%

Source:CEIC,UNWTO,DIIOMI,IMF,BloomConsulting,AECOM,WorldAssociateofZooandAquariums,Michelin,WorldBank,Unicef,UBSestimates.Note:%Δindicateschangefrom2019to2023

AsiaTourism9May2024ab7

ChangeinUBSTourismCompetitiveness

Compositescore(2019vs2015)

HK

Macau

Thailand

Japan

Malaysia

Vietnam

Singapore

Korea

Indonesia

Taiwan

Cambodia

Philippines

Malaysia

4%

2%

MainlandChinaIndonesia

CambodiaIndia

0%

0%

5%

Maca0%

20%

15%

Philippines

-2%

Figure12:Reasonablecorrelationbetweenchangesincompositetourism

competitivenessandgrowthinvisitationtraffic

10%

Vietnam

8%

SouthKorea

R²=20%

Thailand

6%

-5%

25%

Taiwan

Singapore

Japan

-4%

HongKong

-6%

VisitorArrivalCAGR(2015-19)

Source:CEIC,UBSestimates

Figure13:JapanhasthebiggestincreaseofvisitationshareatexpenseofHK

Visitationshare(as%oftotal)

25%

20%

15%

10%

5%

0%

Q423

Pre-Covid

Source:CEIC.Note:Forcomparativepurposes,pre-COVIDperioddefinedasQ318-Q219;visitationshare

expressedaspercentageoftotalAsiavisitorarrivals,ex-ChinaandIndiaasdestinations

AsiaTourism9May2024ab8

Japan

Korea

Singapore

Thailand

Australia

UnitedStates

Maldives

Taiwan

Malaysia

NewZealand

Canada

France

UnitedKingdom

Indonesia

Russia

36,243

Jul23

Oct19

30,696

28,454

100%90%80%70%60%50%40%30%20%10%

0%

Apr19

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

0-9999RMB

50000-79999RMB

Mean(RHS)

10000-29999RMB

80000-99999RMB

30000-49999RMB

100000oraboveRMB

Chinesetourists'favouritedestinationscouldfarebetter

WhilethereturnofChineseoutboundtourismhasnotbeenasstrongassomehoped,

weareconstructiveaboutoutboundtrafficrecoveryfromChina.WeexpectChinese

touriststobethemajorsourceofincrementalvisitationtrafficinthecomingquarters

giventheramp-upofflightcapacityandstrongtravelintentionofChineseoutbound

tourists.Assuch,webelievemarketspreviouslymostpreferredbyChinesetouristsand

withsubduedvisitationrecoverysofarcouldbenefit(eg,Japan,KoreaandSingapore).

Ontheotherhand,marketswithalreadyhighrecoveryratesofChinesevisitationcould

besubjecttotheriskoftrafficdiversion(eg,HKandMacau).

Figure14:UBSEvidenceLabdatasuggestsmainlandoutboundtouristsaresettotravelmorefrequently…

Figure15:…withbiggerbudgetscomparedto2019

TotalSpendingfortheOutboundTrip(T1/2Cities)

Numberofoutboundtripsinthenext12months

100%90%80%70%60%50%40%30%20%10%0%

2.8

2.2

1.9

Oct19Oct20Jul23

OnceTwiceThreeFourFiveMorethanfiveMean

3.0

2.5

2.0

1.5

1.0

0.5

0.0

Source:UBSEvidenceLab(>AccessDataset)Source:UBSEvidenceLab(>AccessDataset)

Figure16:AfterHK/Macau,ChinesetouristspreferredJapan,Korea,Singapore

DestinationstoVisitintheNext12Months

40%35%30%25%20%15%10%5%

0%

Jul23

Oct19

Apr19

Source:UBSEvidenceLab(>AccessDataset)

AsiaTourism9May2024ab9

in

priced

but

Takingadvantageoftheunevengrowthintourismdemand

Webelievecompanieswithheavyrevenueexposuretotourismsectorofdestinations

withimprovedtourismcompetitiveness(i.e.,Japan,Singapore,Malaysia,Koreaandthe

Philippines)couldfundamentallybenefitfromhighervisitationtraffic.

Weidentify112travel-relatedstocksin14destinationmarketsacrosstheairline,airport,

hotel,entertainment,food&drugretail,rail,gaming,retaillandlordandmedical

tourismsectors.OverlayingthechangesinUBStourismscoreswithvaluationZ-scoresof

tourism-relatedstocks,bydestinationmarket,webelievethemarkethasnotfullypriced

intheimprovementintourismcompetitivenessinSingapore,Malaysia,thePhilippines

andKorea,asevidencedbythebelow-meanvaluationsoftheirtourism-relatedstocks.

InthecaseofThailand,valuationmultiplesoftourism-relatedstocksaretradingat

+0.5SDabovetheirhistoricalaverage.Wethinkthereisstillupsidepotentialinselective

nameswithinThailand'stourismspace.WhileJapanshouldbenefitfromimproved

tourismcompetitiveness,wethinkthisislikelyalreadypricedinasvaluationmultiplesof

tourism-relatedstocksare+1SDabovetheirhistoricalmean.Themarkethoweverhasat

leastpartiallydiscountedweakertourismcompetitivenessinCambodiaandIndonesia,

aswellaspotentialvisitationdiversionofoutboundChinesetouristsawayfromHKand

Macau.

Totakeadvantageoftheunevengrowthoftourismdemandindestinationsthatisnot

pricedin,wehighlightsixstockswithhigh-convictionBuycalls,namely:CPAll,Genting

Singapore,MalaysiaAirport,SATS,BloomberryandGrandKoreaLeisure.

Figure17:Marketseemstohavenotfullypricedintheimprovedtourism

competitivenessofSingapore,Malaysia,thePhilippines,Thailand,Korea

ValuationZ-scoreoftourism-relatedstockssince2010

2.5 2.0 1.5 1.0 0.5 0.0(0.5)(1.0)(1.5)(2.0)

(2.5)

Deterioratedcompetitive

tourism

nessand

Impro

vedtourism

notprice

din

Vietna

m

competpr

itivenessbuticedin

MainlandChi

na

India

Japan

Tai

wan

T

hailand

Cambodia

Malaysia

Impro

vedtourism

compenotf

titivenessandullypricedin

Indonesia

HongKong

Macau

Philippi

nes

D

eteriorated

tourism

com

petitiveness

SouthK

oreaSin

gapore

-4%-2%0%2%4%6%

ChangeinUBSTourismCompetitivenessCompositeScore(2023vs2019)

Source:Companydata,Datastream,UBSestimates

Figure18:SixBuy-ratedstockstotakeadvantageofuneventourism-demandgrowththatmaynotbepricedin

BBGTicker

CompanyName

UBSRating

MarketCap(US$bn)

30D

ADVT(US$m)

Share

Price

(LOC/sh)

Price

Target

(LOC/sh)

Uspside/

Downside

(%)

SharePrice

vsQ419

average%

2024ENet

Income(as

%ofpre-

Covid)

2024EP/E

(x)

2025EP/E

(x)

2024EP/B

(x)

2025EP/B

(x)

2024E

DividendYield(%)

2025E

DividendYield(%)

2023-25E

EPS

CAGR

(%)

CPALLTB

CPAll

Buy

14.0

48.4

57.50

74.00

29%

-26%

100%

23.319.14.23.71.8%

2.1%

22%

GENSSP

GentingSingapore

Buy

7.7

24.6

0.88

1.04

19%

-6%

100%

15.014.31.31.24.6%

4.6%

8%

MAHBMK

MalaysiaAirportsHoldings

Buy

3.6

10.7

10.26

11.20

9%

25%

172%

22.819.12.42.33.3%

3.9%

36%

SATSSP

SATS

Buy

2.8

5.7

2.57

3.00

17%

-46%

73%

27.919.73.12.81.3%

2.0%

123%

BLOOMPM

BloomberryResorts

Buy

2.0

0.9

10.34

14.70

42%

-5%

78%

14.77.82.01.70.0%

2.6%

25%

114090KS

GrandKoreaLeisure

Buy

0.6

2.3

13,690

17,500

28%

-34%

91%

12.88.71.91.64.4%

6.4%

49%

Average

-15%

102%

19.414.82.52.22.5%

3.6%

44%

Source:Datastream,UBSestimates.Note:Pricedasof8May2024;valuationdataderivedoncalendarisedbasis

AsiaTourism9May2024