Loss is priced in. Investors can rest assured that ERW will survive even the very worst case of full tourism lockdown through YE22 (despite this being an unlikely scenario in our view). ERW will enjoy high benefits from Thai tourism demand recovery given its high exposure of hotel operations in Thailand. Our BUY rating stands at a YE22 DCF-derived target price of Bt3.60 (50% discount to DCF value, 9.0% WACC and 2.0% terminal growth).
ERW reported core loss of Bt623m in 3Q21, higher YoY from core loss of Bt514m in 3Q20 and QoQ from core loss of Bt558m in 2Q21. Note that ERW had Bt131m asset impairment in 2Q21 but none in 3Q21. Core loss in 3Q21 was near our estimate of Bt586m loss and consensus loss forecast of Bt597m.