Langham Hospitality Investments Ltd. (1270.HK) is an investment holding company which owns a portfolio of luxury hotels in Hong Kong. Currently, the portfolio comprises of three four to five-star hotels: The Langham, Cordis, and the Eaton Hotel. The company also provides administrative, financing, and treasury management services. [mepr-active membership=”1734″ ifallowed=”show” unauth=”message” unauth_message=”Please login or purchase a membership to view full text.”] The Hotels are managed under the Langham Hotels International brand, an internationally recognized hospitality group, which operates 21 hotels across four continents. The brand is dating back to 1865 when The Langham London originally opened as Europe’s first ‘Grand Hotel’.
Langham Hospitality Investments was established in 2013 with headquarter in Hong Kong. The company is a subsidiary of LHIL Assets Holdings Limited, which itself is wholly owned by the Great Eagle Group. Langham Hospitality Investments is listed on the Hong Kong Stock Exchange since May 2013. Shares can also be traded as ADR in the US.
Hong Kong is one of the top travel destinations in the world. The total of 26.6m overnight visitors to Hong Kong decreased by 0.5% only slightly in 2016 due to a decline in Mainland China visitors. However, the number of non-mainland China visitors, especially from other Asian countries, increased by more than 8% to 5.5m visitors last year. Hong Kong’s government continues to invest in new tourism and infrastructure projects, such as the Hong Kong-Zhuhai-Macau bridge and the Mainland China high-speed rail network to Hong Kong, to support tourist visitations to Hong Kong in the long term.
With a workforce of around 1,300 employees, Langham Hospitality Investments reported revenues of 322m HKD (41.5m USD) and a profit before tax of 301m HKD (38.8m USD) for the first half of the year 2016. A slight decrease in revenues of 0.3%, but a substantial increase in profits of 158% compared to the same period a year ago. The company had cash and equivalents of 250m HKD (32.3m USD) at the end of June 2016. Langham Hospitality Investments shows a healthy balance sheet with a strong equity ratio of 62% and a low gearing ratio. The operating margin over the last five years has been with more than 75% well above industry average.
Langham Hospitality Investments’ shares are in an uptrend since February 2016 and gained 40% since. The company is priced at only four times earnings and comes with a dividend yield of more than 7%. Langham Hospitality Investments benefits from the vibrant city of Hong Kong, which remains an important hub for business, shopping and international exhibitions in Asia. With regard on Trump’s politic, we believe that the devaluation of the yuan will come to an end. Together with a stabilizing China economy, we will soon see an increase of visitors from Mainland China again with a positive effect on occupancy and room rates in Hong Kong’s hospitality industry. The shares should have potential to reach at least old highs of 4 HKD this year, an increase of 20%.
AIS Rating: ★★★★★
| 2011 | 2012 | 2013 | 2014 | 2015 | 2016 H1 only |
|
|---|---|---|---|---|---|---|
| EPS (HKD) | 0.31 | 0.35 | 0.27 | 0.28 | 0.71 | 0.13 |
| Change | 13% | -23% | 4% | 154% | 223% |
| P/E | P/E SECTOR |
P/B | P/CF | Equity Ratio* |
ROE | Debt/ Equity** |
Div YLD |
|---|---|---|---|---|---|---|---|
| 4 | 16 | 0.6 | 4 | 62% | 15% | 60% | 7.4% |
* Equity / Total Assets, ** Total Liabilities / Equity
[/mepr-active]
