Hotelier Shangri-La sinks to 2-1/2-yr low, Daiwa downgrades to 'hold' amid HK protests

Shangri-La Asia

06/08/2019 04:06

** Shares of hotel owner and operator Shangri-La Asia Ltd
 0069.HK  slide as much as 5% to HK$8.57, their lowest since
January 2017
    ** Shares on track for a third straight session of decline
    ** Daiwa downgrades Shangri-La to "hold" from "buy" and
trims target price to HK$9 from HK$14, amid a "perfect storm"   
  that is likely to result in the hotel group posting its first
decline in aggregate EBITDA in 2019 in at least five years
    ** Daiwa expects Shangri-La's 1H19 results to be very weak
due to a drop in revenue in most key markets, currency headwinds
from depreciation of many global currencies relative to the U.S.
dollar, and negative impact from ongoing protests in Hong Kong
on one of its key revenue-generating property 
    ** Daiwa expects the Hong Kong hotel market to worsen in
2H19 amid weaker tourist arrivals with a drop in the number of
mainland tourist arrivals due to the worsening relations between
Hong Kong and China arising from the protests
    ** As of Monday's close, Shangri-La stock down 22.2% so far
this year
    ** Shangri-La has underperformed the Hang Seng Commerce &
Industry Index sector  .HSNC  by 2.0 percentage points in the
past one month
    ** Smaller rival Great Eagle  0041.HK  falls as much as 2.7%
to HK$28.80, the lowest since June 2016
    ** Hongkong and Shanghai Hotels Ltd  0045.HK  slides as much
as 2.5% to HK$9.67, its lowest since June 2017 
    ** Sino Hotels  1221.HK  falls 6.2% 
    ** The Hong Kong benchmark index  .HSI  falls 2.8%

 (Reuters Messaging: donny.kwok.thomsonreuters.com@reuters.net)