Having just spent the long weekend in Samui a few things crossed my mind (other than just the sand & the beach), the island was buzzing and yet still peaceful, were hotels still performing alright? Are there plenty of travelers? How many more hotels are building here? And..whats the best direct play on this place? Other than the usual players of the hotels (MINT, ERW, CENTEL) and airlines (NOK, THAI, AAV) there’s only one company, or more specifically fund that is purely related to Samui, its the Samui Property Fund. Here are some basic details on it with some comments

Fund Description

The Fund has invested in the long-term leasehold rights in the Leased Assets, which include the Leased Land, Runway, Parking Apron and Construction on the Leased Land, which are currently being used as Samui Airport, by entering into the Long Term Lease Agreement and Undertaking Agreement.

Leasehold expiry

November 2036

Comment: I remember looking at this fund years ago and thinking what’s the point of buying a leasehold when I can buy freehold funds but in the end they still have some 20 odd years to grow the airport before having to re-pay for the leasehold.

Key market data

Market cap: THB 17.5bn

Dividend yield: 6.78%

P/BV: 1.67x

Comment: No longer a small fund given its market cap and asset size. 

Financials

Comment: That’s an impressive improvement of nearly 60% for the latest Quarter YoY from 2009, means a CAGR of 10% a year…

Is Samui still receiving visitors?

Closing Thoughts

So if I believed that Samui would still 1) Have a growing tourism industry with hotels and travelers 2) That the # of flights to Samui would increase and 3) The airport would be able to increase it’s landing fee & rental rates, 4) The upcoming Bangkok Airways IPO may increase awareness about Samui, then buying a fund that gives me a 6.8% yield with about a +10% increase in payouts annually doesn’t sound so bad, but I still hate leaseholds…

Source(s)

• SETSMART
• C9Hotelworks