• For years, Banyan Tree Holdings, a Singapore hospitality gem had been flying seriously under investors' radar -- until June this year. Since then, the stock has surged from 35 cents to 63 cents. What caught investors' attention is not a travel boom to its beautiful properties in places like Phuket, Bali, and beyond.
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Excerpts from UOB Kay Hian report
Analyst: Adrian Loh
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Highlights • Although hotel investment generated 52% of BTH’s 1H25 revenue, its residences segment will likely drive growth over the next 2-3 years.  Adrian Loh, analyst• Pre-sales of its Thai properties grew at 62% CAGR over 2020-24 and increased 23% yoy last year to S$329m. • Trades at 0.8x 1H25 P/B despite share price having risen 83% ytd. |
• Banyan Tree – but not as we know it. Banyan Tree Holdings (BTH) has a strong brand equity for its hotels as evidenced by numerous awards from Tripadvisor, Forbes and the Thailand Tourism Authority.
While the company’s hotel investments segment is often in the limelight, especially with the 2025 opening of the Mandai Rainforest Resort by Banyan Tree, it is the residences segment (aka property development) that will generate earnings growth over the 2025-27 period.
• Property sales to drive growth, not hotel earnings. Management has stated that its residences arm will drive its PATMI growth in 2026 and 2027 due to strong sales in Thailand.
Pre-sales of its projects in Phuket, Thailand, totalled S$329m in 2024 (+23% yoy) and while there should be a slight decline in 2025, the timing of revenue recognition could result in strong double-digit PATMI growth in 2026 and 2027.
We note that the company has recorded consecutive historic highs for its pre-sales in 2022-24 (see chart overleaf).
Importantly, this segment is now larger than hotel investments with 1H25 segmental profit having jumped 121% yoy, generating a record 26% profit margin (+9.3ppt yoy).
BTH’s key customers for its residences are from Russia while the potential return of Chinese buyers could be a blue-sky scenario.
• Hotel investments – no new investments. Given the company’s desire to move toward a more asset-light model, management stated that it will not look to invest in new hotels except for those located in Phuket.
BTH expects to add around 15 new hotel management contracts per year.
• Fee-based business expected to experience steady growth. This business comprises hotel management, spa, interior design and other services. BTH currently manages 80 resorts and hotels, 73 spas, 68 gallery outlets and three golf courses, with profits from this segment having recovered strongly after the COVID-19 pandemic.
Going forward, one relatively new area that BTH will focus on is the licensing of its brands to branded residences which attracts a licence fee (valid for 20 years) as well as fees for other services.
• 1H25 results were strong. For 1H25, BTH delivered a strong rebound in earnings, with revenue rising 15% yoy to S$206m with growth seen across all segments, ie hotel investments, residences, and fee-based businesses.
Operating profit increased 21% yoy to S$43m, helped by the handover of 83 Laguna Beachside units and contributions from new branded residences.
The highlight was PATMI, which rose 45% yoy to S$9m due to a turnaround in associate contributions and lower finance costs; PATMI would have been higher if not for higher staff, administrative, and marketing expenses.
Banyan's current project, which began construction in 2024 with phases over 5-10 years.
• Positive operating cashflow with a strong balance sheet. BTH generated positive operating cash flow of S$16.1m in 1H25 vs a net outflow in 1H24, reflecting stronger earnings and tighter working capital management.
The top three shareholders of BTH are the Ho family (via Bibace Investment, 33.05%), Qatar Investment Authority (23.75%) and the Far East Organisation (via Goodview Properties, 5.02%). In addition, we understand that Accor S.A. and China Vanke Co., Ltd. each own approximately 5.0% via nominees. -- Source: UOB KH |
Free cash flow, however, was negative after S$29.5m of investing cash outflows with spending on resort refurbishments, property acquisitions and the acquisition of an additional stake in a Thai subsidiary.
This resulted in a 7% decrease in cash to S$107.4m as end-1H25 (end-24: S$115.4m).
In 1H25, total borrowings increased to S$348m thus nudging gearing higher to 0.3x vs 0.25x as at end-24.
• Dividend growth. In 2024, BTH declared DPS of S$0.013 which was an 8% increase over 2023’s S$0.012.
The company did not declare any dividend in 2022 as it was suspended during the COVID-19 period.
• Free float an issue, but liquidity has materially increased in 2025. As a result of the above, and including other management and board ownership, the company’s free float amounts to 26.09% or S$142.5m based on its latest market capitalisation of S$546.1m.
However, we highlight that in 2025, the company’s average daily trading liquidity has increased 10-fold (see chart on RHS) and since the beginning of September has averaged around S$900,000/day.
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Share Price Catalyst
• Higher PATMI due to revenue recognition of the company’s pre-sales numbers.
• Continued robust run rate of hotel management contracts signed.
Overall, Phuket remains Banyan Group's heartland amid global expansion.
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→ BANYAN GROUP's Share Surge: Why Phuket Property Focus will Add More Fuel Ahead |
