A Sean Tourism

THIS REPORT HAS BEEN PREPARED BY MAYBANK KIM ENG RESEARCH.
SEE PAGE 150 FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS. Co. Reg No: 198700034E MAY 2019
Blue Skies, But Keep
Your Seatbelts Fastened
Sadiq Curimmbhoy, Regional Head of Research
With greater growth in ASEAN Tourism comes Understanding your Value Build it and They will Come?
greater investment in the infrastructure. Singapore
and Thailand have clear value propositions that they Proposition & Spending to
Other ASEAN countries are still trying to
continue to invest in. Others are embarking on Maintain it establish their visitor value proposition and are
building new capacity in the hopes of attracting therefore more “emerging”. And there are
regional and global travelers. We reckon the region is Both Singapore and Thailand have invested some encouraging trends. While Vietnam’s
set for significant upside in the sector, but much still greatly in establishing their value proposition as national campaign has arguably not been as
needs to be done. a travel and tourist destination. In the region, effective, individual provinces have instead
Singapore ranks the highest in the latest World taken the initiative, resulting in arrival gains
Economic Forum’s Travel & Tourism
The Growth from over 20% to 70%. There is an airport
Competitiveness Index, reflecting its investment building boom, not just in Vietnam but
as a regional business hub and urban getaway, elsewhere in the region too, further
ASEAN visitor arrivals have been growing at 8% CAGR
with best-in-class safety and infrastructure. But encouraging arrivals.
since 2010. And tourism receipts are a sizeable
Singapore also invests to maintain this: from the
contributor to the economy in many of its markets.
latest Changi Jewel to a SGD9b upgrade to the In the Philippines, significant infrastructure
Yet despite this growth in recent years, the sector
two integrated resorts. spending will be needed, and is being planned,
still holds significant potential to expand further. The
cost of travel is falling, driven by fast growing low- to reach the target of 12m visitors in 2022, from
With over 38m visitor arrivals, a value 7.1m last year. In Indonesia, the plan is to build
cost carrier fleets and apps that permit price proposition from its coastline to the mountains
discovery from hospitality to shopping. International 10 new Bali’s, with the objective of reducing the
to medical facilities, Thailand is the greatest country’s dependence on the island. This is no
travel is less and less a luxury good. attractor of tourists in the region. And, while the easy feat. The investment is set to exceed
recent elections have created doubt in some USD20b, excluding the latest proposals to move
The diversity of ASEAN is also seen in the wide economic policies, all parties see tourism as a
variation within the tourism data. The Greater the capital away from Jakarta.
key driver of economic activity. This is important
Mekong Sub-region, comprising Thailand, Vietnam, as capacity constraints, from pollution to
Laos, Cambodia and Myanmar is where visitor Finally, like any new destination, there will also
infrastructure, are beginning to bite. The be a need to invest in training to provide quality
growth is the greatest: double digit CAGR over the estimated investment exceeds USD83b in
past 10 years. But this is compared to the much visitor services. In short, building a tourism
infrastructure alone over the medium term to culture can take time. And given the breadth of
slower 3.4% CAGR in Malaysia and the Philippines. attract 50m guests.
Looking at tourism receipts as a share of GDP, in the investments needed, and in some cases
Thailand, Vietnam and Cambodia, these exceed 10%, regulatory changes to attract foreign
while they are much lower at 2.1% in the Philippines participation, a critical mass may be required
and 1.4% in Indonesia. before sustainable returns can be achieved.
2019 ASEAN TOURISM: BLUE SKIES, BUT KEEP YOUR SEATBELTS FASTENED 2
The Over-reliance risk: China and Emerging Trends As infrastructure is being built out, gaps are
appearing. One is the lack of quality hotels in
Casinos Vietnam, which has the highest hotel rooms
We are starting to see increasing eco-tourism and
more nature-driven attractions through much of per 1000 tourists in the region, but only 20% of
Despite the slowdown in Chinese arrivals in recent rooms are 3-5 star rated. We were puzzled by
the region. And this potential could be significant
months, they have been a significant driver of why average tourist spending in Vietnam is
in the coming years. Similarly, Thailand leads
ASEAN tourism growth over the years. In part, as dropping and we can’t help but think that
medical tourism and there are few signs that this
some countries allowed the building of casinos to there are not enough higher-quality services to
is slowing. Indonesia and Malaysia are also seeing
attract these tourists, sensing the “low hanging spend on. As this changes in the coming years,
growth in Halal tourism, where both countries
fruit”. And many in the team think Chinese visitor we could see both higher tourist arrivals and
have competitive advantages.
growth will re-accelerate. And there are reasons to higher spending per tourist.
believe this, including that only 9% of the Chinese Indian visitors account for only 3.3% of total
population has a passport suggesting there is pent visitors to ASEAN. Given only 5% of Indian Throughout the report, the team has identified
up demand for international travel. nationals have a passport, continued growth in where they see the best opportunities in the
India could be another driver of a more diversified ASEAN-6. They have also identified what to
However, three things concern us from a returns avoid, including areas where too much was
tourism sector. The number of Indian visitors to
perspective. One, while more Chinese tourists will built and not enough people came.
Thailand doubled to over 2m in 2018 from less
come to the region, it’s unclear if average spending
than 1m in 2014.
per visitor will increase as the incremental new May 2019
traveler may be a lot more price sensitive. Two,
Chinese tourist activity can be correlated to The Ambition and Opportunity
political relations with China and this can vary
significantly. And last, casinos in ASEAN are facing Our economists remind us that there is an ASEAN
greater competition from other countries and even Tourism Strategic Plan. And some of the value of
Macau junkets themselves are entering the space. the “Tourism capital stock” is being unlocked
Casino capacity is increasing fast. So, when the through both public sector infrastructure and
Philippines data indicates that casinos now account private sector investments.
for one-third of activities expenditure, the country
needs to diversify, and do so fast.
CONTENTS
2 Forewords 66 Vietnam 111 Malaysia
67 ONE OF THE FASTEST-GROWING 112 TOURISM DYNAMICS ARE
6 Macro TOURIST DESTINATIONS CHANGING
68 GROWING AFFLUENCE AND LOW- 118 OTHER INTERESTING

7 ASEAN: QUALITY TOURISM COST TRAVEL TOURISM NICHES
DESTINATION OFFERING A UNIQUE,
DIVERSE EXPERIENCE 69 MOST POPULAR AND UP-AND- 123 DOMESTIC IS FANTASTIC
COMING TOURISM HOTSPOTS
17 ENHANCING AIRPORT
INFRASTRUCTURE, OPENING NEW 70 EQUITY TOURISM PLAYERS
FRONTIERS
23 EXPANDING TOURISM OFFERINGS

127 Aviation
128 ASEAN AIRLINES HAVE
82 Indonesia GROWN STRONGLY
34 Singapore
83 GROWING IMPORTANCE & 129 NOT ALL ARE MADE EQUAL
GROWTH POTENTIAL
35 ON A WING AND A PRAYER
134 ASEANS HAVE EMBRACED
87 CREATING 10 NEW BALIS LCC WHOLEHEARTEDLY
36 THE NEED TO STAY ON ITS TOES
92 INVESTMENT OPPORTUNITIES 136 AVIATION AS AN
37 COMPANIES NOT ENTIRELY
INVESTMENT
SINGAPORE DEPENDENT
138 Gaming
44 Thailand 95 Philippines
139 CHINA THE KINGMAKER
45 AMAZING THAILAND – PAST 96 TOURISM, THE NEXT
A NUMBERS GAME GROWTH DRIVER 142 MIND THE RETURNS GAP
48 AMAZING THAILAND – PRESENT 102 “IT’S MORE FUN IN THE 143 FROM FRIEND TO FOE?
MONEY, MONEY, MONEY PHILIPPINES”
53 AMAZING THAILAND – FUTURE 105 MONETISING TOURISM

MORE IS MORE POTENTIAL 144 Appendix
HONG KONG
USD25.0b
LAOS
USD0.6b
Travel and Tourism
THAILAND % of Total Economy in 2017
Highly Reliant More than 7.0%

USD36.4b
VIETNAM Reliant 5.0% - 7.0%
CAMBODIA USD12.7b Less Reliant 2.0% - 5.0%
USD2.4b PHILIPPINES
USD12.5b
MALAYSIA
USD13.0b
SINGAPORE
USD13.9b
INDONESIA
USD28.2b
2019 ASEAN TOURISM: BLUE SKIES, BUT KEEP YOUR SEATBELTS FASTENED
MACRO
Chua Hak Bin (65) 6231 5834 chuahb@maybank-ke.com.sg
Lee Ju Ye (65) 6231 5844 leejuye@maybank-ke.com.sg
Linda Liu (65) 6231 5847 lindaliu@maybank-ke.com.sg
ASEAN: QUALITY TOURISM DESTINATION

OFFERING A UNIQUE, DIVERSE EXPERIENCE UNESCO W ORLD HERITAGE SITES IN ASEAN
“By 2025, ASEAN will be a quality tourism destination
offering a unique, diverse ASEAN experience, and will be
committed to responsible, sustainable, inclusive and
balanced tourism development, so as to contribute
significantly to the socio-economic well-being of ASEAN
people.”
ASEAN Tourism Strategic Plan, 2016-2025
RICH AND DIVERSE NATURAL Malaysia Singapore Thailand

& CULTURAL HERITAGE SITES
Southeast Asia offers rich and diverse set of natural and
cultural tourism heritage sites. The region boasts 11
natural and 17 cultural heritages sites in the UNESCO World
Heritage List.
PRIORITY UNDER ASEAN ECONOMIC COMMUNITY

Indonesia Philippines Vietnam
Tourism is a priority sector and is becoming an increasingly
important component of the ASEAN economic bloc.
Tourism accounts for more than 5% of the economy for
Cambodia, Thailand, and Vietnam.
MACRO
BECOMING A QUALITY DESTINATION, DIVERSIFYING TO NEW MARKETS

VISITOR ARRIVALS TO ASEAN CLIMBED TO 135
MILLION IN 2018
International Visitor Arrivals to ASEAN International visitor arrivals climbed to 135 million in
2018, 3.3 times the size in 2000 (41 million).
Thailand Malaysia Singapore
Vietnam Indonesia Philippines Over the past 5 years, international visitor arrivals have
risen the fastest in Vietnam (+15% CAGR), Indonesia
Cambodia Laos Myanmar
(+12%) and Myanmar (+12%).
Total, %YoY (RHS)
Thailand was the largest destination with 38.3 million
Person in millions
visitors in 2018, followed by Malaysia (25.8 million),
Singapore (18.5 million) and Vietnam (15.5 million).
135
140 35
30
120
25
100 20
15
80
10
60
5
41
40 0
-5
20
TAKEAWAY
-10
International visitor arrivals growing the
0
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
-15 fastest in Vietnam, Indonesia & Myanmar.
Source: CEIC
MACRO

PERFORMANCE VARIES: VIETNAM LEADS,
MALAYSIA LAGS
Visitor Arrivals Growing at Different Pace Vietnam (+25%), Indonesia (+15%) and Philippines (+11%)
Malaysia (25.8m) Thailand (38.3m) Singapore (18.5m)
were the bright tourism spots with the fastest growth of
visitor arrivals between 2015 and 2018.
Indonesia (15.8m) Vietnam (15.5m) Philippines (7.1m)
(% YoY)
Thailand and Singapore have seen visitor arrivals ease
40 slightly in the past two years.
35
Malaysia is the laggard with visitor arrivals falling for the
30
second consecutive year (-0.4%), largely due to the
plunge in Singapore visitors.
25
20 Viet
15
Indo
10 Phil
Thai
5
Sing
0 Msia
-5
-10
-15 TAKEAWAY
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Vietnam and Indonesia were top
performers, while Malaysia was the laggard
Note: Numbers in brackets refer to visitor arrivals in 2018. in recent years.
Source: CEIC
MACRO

TOURISM RECEIPTS ACCOUNT FOR MORE THAN 10%
OF GDP IN CAMBODIA, THAILAND & VIETNAM
ASEAN Tourism USD b 10Y CAGR % of GDP Tourism receipts account for a sizeable share of the
Country
Receipts Account for (2017) (2007 to 2017) (2017) economy in Cambodia (16% of GDP), Thailand (12%), and
a Substantial Share of *Thailand 62.0 +13.5 12.3%
Vietnam (11%). Tourism is still a small proportion of GDP
GDP in TH, VN, KH in Indonesia, Philippines and Myanmar, but the potential
*Vietnam 27.4 +22.2 11.2%
is enormous.
*Malaysia 20.9 +3.4 5.9%
Singapore 19.4 +7.1 5.8% CLMV bloc and Thailand are experiencing stronger
tourist arrivals growth than rest of Southeast Asia.
Indonesia 14.1 +9.2 1.4%
Philippines 6.7 +3.4 2.1%

ASEAN tourism is growing more strongly than global or
Cambodia 3.6 +10.0 16.4% Asian rates. ASEAN’s market share of total international
Myanmar 2.0 +26.9 3.1% visitor arrivals has grown to 10.6% of global arrivals in
2017 (up from 8.6% in 2010) and 38.8% of Asia Pacific
Laos 0.6 +10.8 3.8%
arrivals in 2017 (up from 35.2% in 2010).
* Refers to 2018 numbers, with 10Y CAGR for the period of 2008 to 2018.
Source: CEIC
ASEAN Attracting ASEAN Tourism Share to Global and Asia Pacific

Larger Share of International Visitor Arrivals
International Visitor 38.2% 38.8%
40% 35.2%
Arrivals
35%
30%
25%
20%
15%
8.6% 9.9% 10.6% TAKEAWAY
10%
5%
0%
CLMV and Thailand are experiencing stronger
Share to Global Arrivals Share to Asia Pacific Arrivals tourism growth than rest of Southeast Asia.
2010 2014 2017
Source: UNWTO, Statista, ASEAN Secratariat
MACRO

CHINA TOURISTS DRIVING BOOM, AVOIDING AMERICA
ASEAN Becoming Visitor Arrivals from China China is now the world’s top tourism spender, spending
China’s Favourite Country more than the US and Germany combined.
Person th (2018) CAGR (2011 to 2018)
Destination
Hong Kong 51,038 +8.9 Chinese tourists have been the key growth driver across
Thailand 10,536 +30 ASEAN countries over the past decade.
Japan 8,380 +35
Thailand, Vietnam and Singapore are the most popular
Vietnam 4,966 +20 ASEAN destinations for China tourists.
South Korea 4,790 +14
Singapore 3,416 +14 China tourists to the United States have been
contracting since 2018, impacted by US-China trade
*United States 3,174 +20
tensions.
Malaysia 2,944 +13
Taiwan 2,696 +6.1
*Indonesia 2,093 +24
Philippines 1,255 +26

*Refers to 2017 numbers and CAGR between 2011 and 2017.
Source: CEIC
Chinese Tourists Visitor Arrivals from China

Avoiding US Amid Person m
Trade Conflict, Prefer 21
Asian Destinations 18
60
50
15
32.6 40
12
9 30
6 20 TAKEAWAY
3 10
0
-1.4
0 China tourists favour Thailand, Vietnam and
2009 2010 2011 2012 2013 2014 2015 2016 2017 5M18
-3 -10 Singapore.
US ASEAN
US, %YoY (RHS) ASEAN, %YoY (RHS)
Source: CEIC
MACRO

SLOWING CHINA TOURIST ARRIVALS TO ASEAN, BUT
LONG-TERM PROSPECTS REMAIN POSITIVE
Chinese Tourists Growing More Slowly in Late 2018
ASEAN Chinese Visitor Arrivals
Person th
Thailand Vietnam Singapore Cambodia Philippines Malaysia %YoY (RHS)
3,000 90
80
2,500
70
60
2,000
50
1,500 40
30
1,000
20
10
500
0
0 -10
'15 '16 '17 '18
Source: CEIC
MACRO

PASSPORT PENETRATION STILL LOW IN CHINA
AND INDIA
Passport Penetration in China Still Low at 9% of Total Population China visitors to ASEAN have been easing in late 2018, as
the US-China trade war hit consumer spending and
outbound travel.
Passport Penetration Rate
China visitors are falling more noticeably in Singapore,
UK 76% Vietnam and Thailand in early 2019.
Only 9% of China’s total population have a passport,

significantly below the US (42%), Australia (56%), Canada
Canada 66% (66%) and UK (76%).
Australia 56%
US 42%
Japan 23%
China 9%
TAKEAWAY
India 5%
Only 9% of China nationals hold a passport.
The long-term growth potential remains
0% 10% 20% 30% 40% 50% 60% 70% 80%
enormous.
Source: Compiled by Maybank Kim Eng
MACRO

INDIA AND INTRA-ASEAN ARE BIG GROWTH MARKETS
India Still Only a Small India tourists accounted for only 4.1 million or 3.3% of
ASEAN: Tourists from India
Share of Total Visitors total visitors to ASEAN in 2017. The potential is huge.
Person th % of total (RHS)
in ASEAN
4500 4.0% India’s passport penetration rate is only 5%, much
4000 smaller than the 9% for China.
3500 3.5%
Intra-ASEAN tourists are growing strongly, spurred by
3000
3.0% ASEAN Open Skies Policy, visa-free ASEAN travel, the rise
2500 of budget airlines and growing affluence.
2000
2.5%
1500
1000 2.0%
500
0 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17
1.5%
Source: ASEAN Secretariat
Intra-ASEAN Is the Source Country Person th % of total

Top Source of Visitor Total 125,719 100%
Arrivals to ASEAN, Intra-ASEAN 48,493 38.6%
2017
China 25,284 20.1%
South Korea 7,862 6.3%
Japan 5,028 4.0%
Australia 4,343 3.5%
India 4,153 3.3%
US 4,109 3.3%
TAKEAWAY
United Kingdom 2,976 2.4%
Taiwan 2,582 2.1% India is the next big growth market, as

Russia 2,301 1.8% only 5% of Indian nationals hold a passport.
Source: CEIC
MACRO

OUTBOUND TRIPS PER CAPITA RISES WITH WEALTH
Propensity to Travel Correlated with GDP Per Capita International tourism is still considered a ‘luxury good’ –
people spend a greater proportion of income on tourism
as their income rises.
Most of ASEAN excluding Singapore are still middle-

income or low-income countries. Regional tourism will
likely grow as the countries climb the income ladder.
TAKEAWAY
ASEAN’s regional tourism will likely grow
as wealth increases.
Note: Refers to passengers originating from respective country.

Source: Airbus
MACRO

LOW COST CARRIERS BOOSTING TOURISM
Low Cost Carriers Penetration Rate Has Risen Significantly in Past Decade Low-cost air travel has boosted ASEAN’s tourism
industry. Low cost carrier (LCC) penetration rate in Asia
International Low Cost Carriers Penetration Rate Pacific has grown rapidly in the past decade despite a
late start. AirAsia and Lion, the two largest LCC groups
in Asia, only started operations in early 2000s.
60% 2008 2018
The relatively low penetration of LCCs in ASEAN’s
51%
potential markets such as China (14%) and India (23%)
50% presents a huge opportunity for tourism growth for
ASEAN.
40%
40%
35%
33% 32% 32% 31%
29%
30% 26% 26% 25% 24% 23%
20%
15% 14% 15% 14%
12% 12% 13%
11% 11%
10% 7%
3%
1% 0%
0%
TAKEAWAY
Proliferation of LCCs over the past decade
Source: CAPA – Center for Aviation has driven a tourism boom.
MACRO

MOST OF ASEAN RANKS LOW IN TOURISM
COMPETITIVENESS
World Economic Forum’s Travel & Tourism Competitiveness Index 2017 ASEAN still lags in tourism competiveness in global
rankings, especially Vietnam (#67 out of 136),
Enabling Environment Natural and Cultural Resources Philippines (#79), Laos (#94) and Cambodia (#101).
Indonesia and Vietnam have made the biggest
Change Cultural improvements since the 2015 ranking, both climbing 8
2017 Human
Ranking
from Country Business
Safety & Health & resource ICT Natural
resources places in 2017.
2015 environ- &
security hygiene & labour readiness resources
ment business
market
travel ASEAN performs well in providing safety and security and
a sufficient labour market for tourism. However, ASEAN
4 +5 Japan 5.3 6.1 6.4 5.2 6.1 4.3 6.5 scores poorly in the cultural resources subindex – ASEAN
has yet to fully capitalise on its available cultural
7 0 Australia 5.1 6.1 6.1 5.1 6.0 5.2 5.0
resources as they are still less valued than natural
11 +2 Hong Kong 6.2 6.5 6.6 5.4 6.5 3.5 3.0 assets.
13 -2 Singapore 6.1 6.5 5.5 5.6 6.1 2.4 3.1
26 -1 Malaysia 5.4 5.8 5.2 5.2 5.2 4.1 2.9
34 +1 Thailand 4.7 4.0 4.9 4.9 4.8 4.9 2.8
42 +8 Indonesia 4.5 5.1 4.3 4.6 3.8 4.7 3.3
67 +8 Vietnam 4.4 5.6 5.0 4.9 4.2 4.0 3.0
79 -5 Philippines 4.3 3.6 4.8 4.8 4.0 4.0 1.9 TAKEAWAY

94 +2 Laos 4.7 5.4 4.3 4.6 3.1 3.0 1.3
ASEAN lags behind in tourism
101 +4 Cambodia 3.7 5.1 4.0 4.1 3.6 3.2 1.6
competitiveness, especially in capitalizing
ASEAN Average 4.7 5.1 4.8 4.8 4.4 3.8 2.5 on cultural resources.
Note: Ranking shows performance out of 136 countries. Myanmar was not included in the 2017 report due to insufficient data.
Source: World Economic Forum
MACRO
ENHANCING AIRPORT INFRASTRUCTURE, OPENING NEW FRONTIERS

TOURISM INFRASTRUCTURE REMAINS A WEAK SPOT
World Economic Forum’s Travel & Tourism Competitiveness Index 2017 ASEAN scores highly in prioritisation of tourism as a
national development strategy, with most countries
Travel & Tourism (T&T) Policy rolling out tourism roadmaps to drive growth. ASEAN
Infrastructure
& Enabling Conditions also scores highly in price competitiveness.
Change
2017
from Country Environ-
Ranking
2015 Prioritisa- Interna- Price
mental Air Ground & Tourist ASEAN’s infrastructure readiness gap persists between
tion of tional Competi-
T&T Openness tiveness
Sustain- Transport port Service the most advanced in the region (Singapore, Thailand,
ability
Malaysia) versus the rest of ASEAN.
4 +5 Japan 5.4 4.4 4.6 4.4 4.6 5.4 5.3
7 0 Australia 5.1 4.8 3.8 4.5 5.7 3.6 6.1
11 +2 Hong Kong 5.8 3.9 4.2 4.3 5.5 6.4 4.4
13 -2 Singapore 6.0 5.2 4.7 4.3 5.3 6.3 5.4
26 -1 Malaysia 4.7 4.1 6.1 3.5 4.5 4.4 4.7
34 +1 Thailand 5.0 3.8 5.6 3.6 4.6 3.1 5.8
42 +8 Indonesia 5.6 4.3 6.0 3.2 3.8 3.2 3.1
67 +8 Vietnam 4.0 3.0 5.3 3.4 2.8 3.1 2.6
79 -5 Philippines 4.8 3.4 5.5 3.6 2.7 2.5 3.4
94 +2 Lao PDR 4.7 3.0 5.7 3.8 2.1 2.4 3.5

TAKEAWAY
101 +4 Cambodia 5.1 3.5 5.1 3.3 2.1 2.4 2.9
ASEAN’s infrastructure readiness scores

ASEAN Average 5.0 3.8 5.5 3.6 3.5 3.4 3.9
poorly, especially for Philippines and
Note: Ranking shows performance out of 136 countries. Myanmar was not included in the 2017 report due to insufficient data. CLV countries.
MACRO

ASEAN AIRPORTS FACING BOTTLENECKS
Six Major ASEAN Airports Operating Beyond Capacity Six out of eight major ASEAN international airports are
facing over-utilisation and bottlenecks, including in
Passengers (2018)
Thailand, Philippines, Vietnam and Indonesia.
Airport City Actual Capacity Utilisation Ho Chi Minh’s Tan Son Nhat airport is running at over
(million) (million) (%) 50% above its designed capacity, while Bangkok’s
Suvarnabhumi & Don Mueang, as well as Manila’s Ninoy
Changi Singapore 65.6 85 77
Aquino are running at above 40% capacity.
Kuala Lumpur Kuala Lumpur (Malaysia) 60.0 70 86
Many ASEAN countries have under-invested in airport
Soekarno-Hatta Jakarta (Indonesia) 66.9 60 112
infrastructure and will need to step up investments to
Suvarnabhumi Bangkok (Thailand) 63.4 45 141 accommodate rising tourist arrivals.
Don Mueang Bangkok (Thailand) 40.8 30 136
Ninoy Aquino Manila (Philippines) 45.1 31 145
Tan Son Nhat Ho Chi Minh (Vietnam) 38.0 25 152
*Noi Bai Hanoi (Vietnam) 26.0 25 104
*Refers to preliminary estimate for 2018.

TAKEAWAY
Several ASEAN international airports are
facing bottlenecks, including in Thailand,
Philippines, Vietnam and Indonesia.
MACRO

EXPANDING AIRPORT CAPACITY TO MEET RISING
TOURISM DEMAND
ASEAN Pumping Billions Into Airport Expansion Amid Travel Boom ASEAN is investing and expanding its airport capacity to
meet increasing demand amid the tourism boom.
Country Airport Expansion Plans
Indonesia, Philippines & Thailand are investing billions to
Terminal 5 for Singapore Changi Airport and a third runway are expected to start expand and build new international airports.
Singapore operations in 2030 as part of the Changi East project. The upgrading and expansion of
Terminal 1 is due for completion this year.
Funding for the airport expansion comes from both
A new runway for Jakarta’s Soekarno-Hatta airport will start operating in 2019. private sources as well as the government (for Indonesia,
Construction for a fourth terminal is expected to begin in 2021. Philippines, Thailand and Malaysia).
Indonesia A second international airport located 10km north of existing Soekarno-Hatta airport is
being studied. The new Rp100trn ($7b) airport will potentially be operated as a private-
public partnership between Angkasa Pura II, one of the two state-owned airport
operators, and private investors.
KLIA expansion programme to add 30% of capacity (or 20m passengers), enabling it to
handle 50 million passengers over the next three years.
Malaysia
Capacity expansions at other secondary international airports are also expected,

including an RM1.2b ($291m) expansion project for the Penang airport.
The Php10b ($193m) Clark International Airport expansion project, which was one of the
flagship infra projects under the “Build, Build, Build” programme, is expected to
Philippines
complete in 2020. Plans to rehabilitate the Ninoy Aquino International Airport (NAIA) at
an estimated cost of Php102b ($2b) have been proposed.
International airports, Suvarnabhumi airport and Don Mueang airport, will be expanded at
cost of Bt63b ($2b) and Bt36b ($1.1b) respectively to boost its capacity to 90m and 40m TAKEAWAY
passengers per annum respectively.
Thailand
Initial plans for other secondary airports at Chiang Mai and Phuket have also been
ASEAN is investing heavily in airport
proposed. infrastructure amid the travel boom.
MACRO

VIETNAM IS INVESTING HEAVILY IN NEW AIRPORTS
Tan Son Nhat Intl – Vietnam plans to increase the total number of airports
Expansion Plans to 28 by 2030, up from the current 23. About 10 to 13 of
Include New Terminal the airports will serve international flights.
(Yellow) & Other
Supporting Facilities Ho Chi Minh’s Tan Son Nhat International Airport will see
(Blue) a new third terminal and double its annual capacity to
50 from 25 million passengers.
A new international airport, Long Thanh International,

will be built in the southern province of Dong Nai at an
estimated cost of $16b. The first phase will be
completed in 2025 with an initial capacity of 25 million
Source: VnExpress International passengers a year.
Vietnam
Long Thanh
International
TAKEAWAY
Vietnam is expanding existing airports &
building new airports to meet soaring
Source: Airports Corporation of Vietnam, Heerim Architects & Planners Co., Ltd demand.
MACRO

FRONTIER ECONOMIES ARE STEPPING UP,
ESPECIALLY CAMBODIA
Cambodia New Phnom Cambodia is constructing two new international airports
Penh International in Phnom Penh and Siem Reap at total cost of $2.5b, to
be ready by 2022-2025. The new Phnom Penh
international airport is about 6 times the size of the
existing airport.
Laos’ Vientiane Wattay International Airport completed

its expansion in Aug 2018 at an estimated cost of $90m.
Myanmar is investing $1.5b in a new international

airport, Hanthawaddy International Airport, where
construction will resume in 2019 after a two-year delay
Source: Khmer Times
due to financing issues.
Laos Vientiane Wattay

International
TAKEAWAY
CLMV economies are also expanding their
international airport capacity, in particular
Cambodia.
Source: Vientiane Times
MACRO

SINGAPORE ENHANCES PASSENGER EXPERIENCE; PHILIPPINES
ENVISIONS AIRPORT TO BE NEXT REGIONAL GATEWAY
Jewel Changi’s Singapore Changi Airport added a new SGD1.7b
Rain Vortex, World's (USD1.3b) five-storey glass dome, the “Jewel Changi
Tallest Indoor Airport”, in April 2019 with a wide range of retail & F&B
Waterfall offerings to enhance passenger experience.
The Jewel will strengthen Singapore Changi Airport’s

regional air-hub status amidst intensifying regional
competition.
The Philippines’ Clark International Airport is one of the

flagship infrastructure projects under the “Build, Build,
Build” programme and is envisioned to be the region’s
next premier gateway.
Source: Shutterstock
Philippines Clark
International Airport
New Terminal
TAKEAWAY
Singapore strengthens its air hub status
with “Jewel Changi”.
Sources: BusinessWorld, Capital Town Pampanga
MACRO
EXPANDING TOURISM OFFERINGS

BUILDING INTEGRATED RESORTS
Competition Heats Up in the Region to Ramp Up Casinos & Integrated Resorts ASEAN is building more casinos and integrated resorts to
attract tourists, and competition in this space is heating
Country Details up in the region.
Two integrated resorts – Marina Bay Sands and Resorts World - will invest $9b Cambodia, Vietnam and the Philippines have been
to open new attractions . Resorts World will expand their amusement park to
building casinos to attract Chinese tourists. Myanmar is
Singapore Minion Park and Super Nintendo World, and build two hotels in the luxury and
upscale segments; Marina Bay Sands will add a fourth hotel suite tower and looking into legalizing casinos for foreigners.
build a concert arena.
Singapore’s two integrated resorts – Marina Bay Sands
NagaCorp will build its third casino costing around $4b, rivalling the size of
and Resorts World – are investing SGD9 billion on new
Cambodia Singapore's Marina Bay Sands. About 150 casinos licensed at end of 2018,
mostly operating in coastal province of Sihanoukville. hotels and attractions, including a concert arena and
amusement parks.
Major casinos include Resorts World Manila. Okada Manila, the Solaire Resort
Philippines & Casino (by Bloomberry) and the City of Dreams Manila. Bloomberry will
start construction of its second casino in Quezon City in June 2019.
Adding four casinos on top of existing 10. Macau’s Suncity Group Holdings is
Vietnam building the largest casino, a $4b integrated resort project (Hoiana Resort)
that spans almost 1,000 hectares in Central Vietnam.
Three casino/integrated resort licenses may be awarded by 2020, with the

Japan
first resort potentially opening by 2024 or 2025.
Jeju Island opened an integrated resort in March 2018. Caesars

South Korea Entertainment's casino resort will open in 2021, just a 15-minute drive from
Seoul’s Incheon International Airport. TAKEAWAY
More ASEAN countries are building casinos
and amusement parks to widen their range
of offerings.
MACRO

INTEGRATED RESORTS BOOST TOURISM, JOBS &
TAX REVENUE
Singapore: Visitor Arrivals Grew Strongly After IRs Opened in 2010
Visitor Arrivals %YoY (RHS)

Person m
20 2018: 40
18.5m
18 2010: Opening of IRs (MBS and RWS)
30
16
14
20
12
10 10
8 2003:
6.1m
0
6
4
-10
2
0 -20
'91 '94 '97 '00 '03 '06 '09 '12 '15 '18
Source: CEIC
MACRO

CHINA TOURISTS TO PHILIPPINES JUMPED AFTER
CASINOS OPENED
Philippines: Chinese Visitors’ Share Doubled from 9% in 2013 to 18% in 2018 Singapore’s visitor arrivals grew by more than 10% for
three consecutive years (2010-12) after Marina Bay
Sands and Resorts World opened their doors.
Philippines: Visitor Arrivals from China
Person th % of total (RHS) Philippines has experienced a surge in China visitor
Mar-17:
arrivals since 2013, when the casinos started opening.
1400 Feb-15: Okada Manila 20%
City of Dreams
Mar-13: Solaire Cambodia is seeing a China tourism boom fuelled by
Resort and Casino 18% casino openings, with Chinese tourists more than
1200 quadrupling from 463k in 2013 to 2 million in 2018.
16% There are around 50 Chinese-owned casinos to date in
Sihanoukville, and around 30% of Sihanoukville’s
1000 14% population is now Chinese.
12%
800
10%
600
8%
400 6%
4% TAKEAWAY
200
2% Singapore’s and Manila’s integrated resorts
help boost tourism, create jobs and
0 0% increase tax revenue.
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Source: CEIC
MACRO

ECO-TOURISM AND INCLUSIVE GROWTH
Indonesia ‘10 New In Indonesia, President Jokowi’s ‘10 New Balis’ aims to
Balis’ Plans to attract more tourists to eco-destinations to broaden the
Replicate Bali’s fruits of growth. The first three priority locations are
Success to Other Mandalika Resort (Lombok), Borobudur Temple (central
Provinces Java) and Lake Toba (North Sumatra).
Cambodia’s Cardamom National Park, Thailand’s

northern area, and Laos’ Luang Prabang offer
“glamping” and luxury camping experiences, with
activities such as elephant-watching, zip-lining and
trekking.
Source: Straits Times
Over-tourism in famous tourist spots such as Phuket

(Thailand), Bali (Indonesia) and Boracay (Philippines) is
also encouraging the shift towards sustainable eco-
tourism.
Thailand: Four
Season’s Golden
Triangle Tented Camp
TAKEAWAY
Eco-tourism is low-impact, more
sustainable and spreads the benefits to
rural communities.
Source: Four Seasons
MACRO

HERITAGE TOURISM: ASEAN HOSTS 37 UNESCO
WORLD HERITAGE SITES
Cambodia’s Angkor Heritage tourism is on the rise, with ASEAN boasting 37
Wat Temple UNESCO World Heritage sites. Cambodia’s iconic temple
Angkor Wat received around 2.6 million tourists in 2018.
Tourist arrivals continued surging despite the steep
increase in admission fees (more than +20%) in Feb 2017.
Vietnam’s heritage sites include Ha Long Bay and Hoi An

Ancient Town which are emerging as popular
destinations, receiving 1.8 million foreign tourists in
2017.
Thailand is encouraging cultural tourism with events

such as the Songkran Festival, while also promoting
lesser-known provinces where more traditional
celebrations can be observed.
Vietnam’s Hoi An
Ancient Town
TAKEAWAY
Heritage tourism boosting second-tier
provinces across ASEAN.
MACRO

THAILAND LEADS IN MEDICAL TOURISM
Thailand Tops the Number of JCI Accreditation Thailand is the regional leader in medical tourism, with
Number of JCI the highest number of JCI accreditation (66) in the
Accreditation in Asia Thailand 66 region. Thailand sees strong demand from the Middle
East and CLMV countries.
India 38
Thailand is also becoming an attractive retirement spot,
Indonesia 30 with the number of retirement visa applications almost
doubling to nearly 73k in 2017 from less than 40k in
2013. This trend will be boosted by offerings such as Jin
Singapore 22
Wellbeing County - a ‘medical city’ for both Thai and
foreign retirees built on the outskirts of Bangkok.
Malaysia 13
Singapore and Malaysia (Kuala Lumpur & Penang) are
0 20 40 60 80 also experiencing growth in medical tourism.
Source: Joint Commission International (JCI)
Thailand’s Measure Details

Government Measures
In 2017, the Thai government extended the stay for
to Promote Medical medical tourists from China and the CLMV countries
Tourism from the previous 30 days to 90 days.
Visa Citizens from Australia, Canada, Denmark, Germany,

extension Finland, France, Italy, Japan, the Netherlands,
Norway, Sweden, Switzerland, UK and US can apply for
the long-stay visa of up to 10 years. The permit would
also be applicable for their spouses and children up to
20 years of age.
TAKEAWAY
In January 2018, the Thai government launched a Thailand is leading in medical tourism and
‘Smart Visa’ scheme which grants a four-year stay to
Smart visa investors and highly skilled professionals working in 10 attracting more foreign retirees, boosted
specialised fields identified by the government as part
of its technology push under the Thailand 4.0 plan.
by government support measures.
Source: Compiled by Maybank KE
MACRO

MALAYSIA RANKS FIRST IN ASEAN FOR
RETIREMENT TOURISM
Malaysia Ranks #5 in the Annual Global Retirement Index 2019 Malaysia’s measures such as Malaysia My Second Home
(MM2H) has made it easier for foreigners to earn long
Visa &
Rank Country
Residence
Healthcare Climate Cost of Living Final Score term stay visas. Penang comes highly recommended by
the International Living Magazine (which ranked Malaysia
1 Panama 100 81 85 73 88.9
#5 globally as best country to retire in). Retirement
2 Costa Rica 88 87 91 74 87.8
villages such as Eden-on-the-Park in Kuching and the
3 Mexico 88 87 88 74 87.4
Green Leaf (Sepang) are also seeing foreign demand.
4 Ecuador 93 89 95 72 87
5 Malaysia 94 95 78 82 86
6
Medical tourism is also gaining ground with tourists from
Colombia 81 85 90 88 85.4
Indonesia, Myanmar, Vietnam and China. Malaysia
7 Portugal 84 76 88 77 85.2
recorded 1 million healthcare travellers in 2017.
8 Peru 85 81 88 92 84
9 Thailand 71 92 83 94 83.5
10 Spain 74 85 87 75 82.2
Indonesia formed the Bali Retirement Tourism Authority
to develop retirement tourism, with plans to have
Source: International Living Magazine
several traditional villages host and cater to elderly
tourists.
Top Ten Participating Countries in Malaysia’s MM2H Programme
Total
Country of Nationality % of total
(2002 to Aug 2017)
Total 35,821 100.0
China 9,902 27.6
Japan 4,372 12.2
Bangladesh 3,746 10.5
United Kingdom & Northern Ireland 2,499 7.0
Rep. Of Korea 1,514 4.2 TAKEAWAY
Iran 1,351 3.8
Singapore 1,346 3.8 Malaysia’s retirement tourism boosted by
Taiwan 1,271 3.5 My Second Home program and retirement
Pakistan 992 2.8
villages.
India 937 2.6
Others 7,891 22.0
Source: Malaysia My Second Home (MM2H)
MACRO

GROWING POPULARITY: WEDDING TOURISM AND
HALAL TRAVEL
Bali: Wedding Tourism Wedding tourism is gaining popularity in Thailand (Hua
Gaining Popularity Hin, Phuket, Krabi, Pattaya) and Bali in Indonesia.
Thailand is especially popular among Indian tourists for

weddings, with over 400 couples per year.
Halal travel is rising in Malaysia and Indonesia, which

shared the top spot in the latest global Muslim tourism
index. Indonesia’s tourism ministry is targeting 5 million
foreign Muslim tourists in 2019, almost double the 2.6
million in 2018.
Malaysia & Indonesia 2019 Rank Destination Score Change

Ranked First in the
2019 Global Muslim 1 Malaysia 78 0
Travel Index 1 Indonesia 78 +1
3 Turkey 75 +1
4 Saudi Arabia 72 +1
United Arab
5 71 -3
Emirates TAKEAWAY
6 Qatar 68 0
7 Morocco 67 +3 Wedding tourism and halal travel are
8 Bahrain 66 0 becoming more popular.
9 Oman 66 +1
10 Brunei 65 +1
Source: Compiled by Maybank KE
MACRO

SPORTS TOURISM IS A GROWTH MARKET ESPECIALLY
FOR THE YOUNG
Sports tourism is a niche market catering for the
millennial and younger generation.
Thailand is positioning itself as a sports tourism

destination, securing a three-year contract to host the
international motorcycle race event, MotoGP, from 2018-
2020. Thailand also plans to promote golf, cycling, muay
thai, etc as part of their plan to build up the sports
industry.
Indonesia and Malaysia are also seeing a rise in

international sports events, such as marathons (e.g. Bali
Marathon, Indonesia) and cycling races (e.g. Le Tour de
Langkawi, Malaysia). Singapore has been hosting the F1
race since 2008, while Vietnam will also start hosting its
first F1 race in Hanoi in 2020.
Source: Google images
TAKEAWAY
Sports tourism is the next growth market.
MACRO

MICE INDUSTRY CAN HELP BOOST TOURISM
Asia Pacific Top Cities by Number of International Meetings Organised in 2017 The MICE (Meetings, Incentives, Conferences and
Exhibitions) industry can have positive spillover effects
Convention Convention on the tourism sector.
No. of Center No. of Center
Rank City Rank City
Meetings Space Meetings Space
(‘000 sq ft) (‘000 sq ft) Singapore leads in Asia Pacific in hosting the highest
number of MICE events, followed by Bangkok (#4), Kuala
1 Singapore 160 596 15 Bali 40 90
Lumpur (#10), Manila (#14) and Bali (#15).
2 Seoul 142 4,600 16 Macao 39 106
3 Hong Kong 119 17 Jeju 37 Improving connectivity is also boosting the status of
smaller cities such as Penang in Malaysia and Danang in
4 Bangkok 110 100 18 Busan 33 93 Vietnam as MICE venues. For instance, Danang hosted
5 Tokyo 101 100 19 Brisbane 29 551 world class events such as the 2017 APEC Summit and
the 6th Global Environment facility Assembly (hosting
6 Beijing 81 319 19 Ho Chi Minh City 29 646 1,500 delegates).
7 Sydney 76 375 21 Nagoya 25
8 Taipei 76 100 …
9 Melbourne 67 1,000 27 Chiang Mai 21 32
10 Kuala Lumpur 65 307 29 Hanoi 18
11 Shanghai 61 3,974 39 Penang Island 15
12 New Delhi 59 100 51 Jakarta 13 27
14 Manila 42 100 52 Danang 12
Source: International Congress and Convention Association, Cvent TAKEAWAY

Developing the MICE industry will further
boost ASEAN tourism.
MACRO

HOME SHARING PLATFORMS PROVIDING NEW SUPPLY
Airbnb Statistics in Asia, 2017 Technology is boosting travel especially through home
sharing platforms such as Airbnb and Tujia (in China).
Inbound guest Median host Host payout Average guest
Country Unique hosts The Airbnb Experiences programme also allows hosts to
arrivals earnings (USD m) stay length
earn extra income – for instance on cooking classes, food
Japan 5,388,400 26,300 $9,900 556.3 3.3 tours, and cultural tours.
China 2,521,400 61,100 $600 137.0 2.3
A younger generation of tech-savvy “free, independent
South Korea 1,584,400 13,400 $3,300 108.1 2.6
travelers” (FITs) opt for the self-guided, self-plan travel
Taiwan 1,187,900 12,200 $1,900 67.8 2.4 experience.
Malaysia 1,157,800 11,700 $1,200 42.0 2.3
Vietnam is seeing rapid growth on the Airbnb platform,
Thailand 1,030,500 14,200 $2,100 97.7 4.1 with the Vietnamese Dong one of the fastest-growing
currencies in the Airbnb payment system.
Indonesia 812,100 11,200 $2,100 84.6 3.7
Philippines 756,500 11,200 $1,700 39.2 2.9
Hong Kong 403,400 5,100 $3,500 49.9 3.5

TAKEAWAY
Singapore 324,600 4,100 $3,900 51.2 4.1 Online platforms such as Airbnb provide
Vietnam 300,200 5,900 $1,000 16.2 3.0 new types of accommodation and travel
Source: Airbnb
experiences.
SINGAPORE
SINGAPORE
Neel Sinha (65) 6231 5838 neelsinha@maybank-ke.com.sg
ON A WING AND A PRAYER

Despite healthy growth in receipts and visitor arrivals through the
decade, tourism contribution to GDP has somewhat stagnated.
Visitor arrival growth is over-reliant on Mainland China volumes,

which, despite the high growth potential, are hardly ever linear.
Changi Airport’s once undisputed status as Southeast Asia’s air

transport hub faces pressure from neighbouring countries upgrading
their airport infrastructure and LCC-related disruption.
THE NEED TO STAY ON ITS TOES

Unlike the rest of Southeast Asia that boasts many experiential
locations, Singapore’s value proposition is largely intertwined with it
being a regional business hub and an urban getaway of convenience
with first-world safety and efficient transport infrastructure.
To this end, a constant focus on investment and upgrading

infrastructure is key to maintaining regional competitiveness.
Key developments include opening of Changi Terminal 4 in 4Q17,

Jewel Changi in 2Q19 while the material medium-term investments in
the pipeline are a cSGD9b upgrade to the two integrated resorts and
Changi Terminal 5 development.
COMPANIES NOT ENTIRELY SINGAPORE DEPENDENT

While the domestic tourism market faces some challenges, it is
UNESCO WORLD HERITAGE SITE IN SINGAPORE
worth noting many of the companies in the value chain are Botanic Gardens
geographically diversified and positioned to benefit from the
broader growth theme in the region.
Our top three preferred picks on the theme are Far East Hospitality
Trust, CDL Hospitality Trust and SATS
SINGAPORE
INDUSTRY SNAPSHOT
MODERATE CONTRIBUTOR TO GDP
How large is Singapore’s tourism sector? Tourism receipts grew 1.8x over the past decade or at
a 6.3% CAGR.
(SGDb) Tourism receipts As % of GDP (RHS) (%)
30 12 However, share of GDP remained relatively range-
25 10 bound at 5-6% over this period as other segments of
the economy similarly grew, and, potentially with
20 8 rising regional competition eating into wallet share.
15 6
The greatest proportion of visitor spend is on
10 4
transport-related costs and taxes and business,
5 2 education, medical expenses.
0 0
The sector employs c3.4% of the workforce, relatively
2018E
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
unchanged in the past decade. Almost half of those
employed are in the sightseeing, entertainment and
Source: CEIC
gaming segment.
Where do visitors come from? (2018) What do visitors spend on? (2018E)
Greater China is the largest single country origin for
Oceania Africa visitor arrivals followed by Indonesia (at c.45% of
6.8% 0.5%
Europe ASEAN bloc).
11.1%
Accomm
Other* odation
Americas Asean 28.0% 20.8%
4.7% 35.2%
West Asia F&B
Sightsee 9.3%
0.9% South ing,
Asia Entertai
9.4% nment
Retail
Greater &
19.9%
Gaming
North
China
23.5% 21.9%
TAKEAWAY
Asia
7.9%
Moderate sized contributor; despite good
Other*: Airfare on SG carriers, business, growth, contribution to GDP has stagnated.
education, medical, transport, transit, port taxes
Source: CEIC Source: CEIC
SINGAPORE
VISITOR GROWTH DYNAMICS

LARGEST VISITOR SOURCE IS THE MOST VOLATILE
3mma growth of top 10 countries for visitor arrivals The top 10 countries accounted for around 80% of
(YoY %) total visitors in 2018. The largest, Greater China, is
also by far the most volatile.
40
30 Greater China visitor swings stem largely from the

Mainland (c.79% of total in 2018). The lion’s share of
20
the rest is from Hong Kong SAR and relatively stable.
10
Mainland Chinese visitors’ destination preferences can
0 be fickle and, we believe, influenced by various
Apr-11
Apr-14
Apr-17
Jul-10
Jul-13
Jul-16
Oct-09
Jan-12
Oct-12
Jan-15
Oct-15
Jan-18
Oct-18
factors like confidence in the domestic economy,
(10)
relative RMB strength, group tour incentives for
(20) various countries, zero dollar fares from LCCs etc.
Greater China Indonesia India
Malaysia Australia USA
Japan Philippines S. Korea This would suggest China is a price sensitive market
UK with a lower contribution to tourism receipts relative
Source: CEIC to its visitor volume. In 2017 China accounted for 24%
of visitor share but just 15% of tourism receipts share
Share of top 10 countries (2018) Can others in top 5 compensate for
and, in the past 5 years there is an average c8.5ppt
China volatility?
difference between the two.
('000)
Other Greater
20.9% China
5,000 1.4x
2013 2018 India is the next largest growth market amongst the
UK 4,500 top 5 visitor arrival countries. But it may take well
23.5%
3.2% 4,000
3,500 Flat
over a decade to reach similar volumes of Mainland
S. Korea 3,000 Chinese visitors today.
3.4% 2,500
Philippin Indonesia
es 16.3% 2,000 1.5x Flat Flat
4.2% 1,500
India 1,000
Japan 500
4.5% USA 7.8%
-
TAKEAWAY
3.5%
Malaysia
Australia 6.8% Exposure to Mainland Chinese visitor
6.0%
volatility will not end anytime soon; but
Source: CEIC Source: CEIC contribution to tourism receipts is muted.
SINGAPORE
SINGAPORE’S VALUE PROPOSITION

THE PLEASURE OF BUSINESS
Total passenger movement at Changi Airport Visitor arrivals and Changi passenger traffic grew 1.8x
and 1.6x in the past decade or at a 6.2% CAGR and 5.1%
('000) CAGR respectively.
Visitors Transit & Residents
3,000
No historic sites like Borobudur, Bayon; beaches like
2,500
Boracay, Bali, or ecotourism of Luang Prabang, Langkawi.
2,000
1,500 GFC
But geographically at the cross-roads of Asia. The
government’s focus on enabling an efficient business
1,000 SARS environment, safety & security and top-notch transport
500 infrastructure has made Singapore a major regional
business hub.
-
Jan-90
Mar-91
May-92
Jan-97
Mar-98
May-99
Jan-04
Mar-05
May-06
Jan-11
Mar-12
May-13
Jan-18
Sep-94
Sep-01
Sep-08
Sep-15
Jul-93
Jul-00
Jul-07
Jul-14
Nov-95
Nov-02
Nov-09
Nov-16
It is the only Asian city that consistently features in top
global cities for MICE events in the past decade.
Source: CEIC, Changi Airport Group, Maybank Kim Eng
Other attractions are children-centred theme parks,
hosting of large-scale sporting & entertainment events
Global ranking of top 10 cities for MICE events and its two integrated resorts with gaming.
MICE
events 2010 ... 2014 2015 2016 2017 Multi-cultural and a melting-pot of the region’s various
Top 10
cities City Events City Events City Events City Events City Events
cultures and traditions.
1 Vienna 160 Paris 214 Berlin 195 Paris 196 Barcelona 195
2 Barcelona 135 Vienna 202 Paris 186 Vienna 186 Paris 190
3 Paris 131 Madrid 200 Barcelona 180 Barcelona 181 Vienna 190
4 Berlin 129 Berlin 193 Vienna 178 Berlin na Berlin 185
5 Singapore 119 Barcelona 178 London 171 London 153 London 177
TAKEAWAY
6 Copenhagen 103 London 166 Madrid 171 Singapore 151 Singapore 160
What draws c18m visitors annually to
7 Stockholm 102 Singapore 142 Singapore 156 Amsterdam 144 Madrid 153
Singapore are: 1) business travel, 2) long-
8 Amsterdam 98 Amsterdam 133 Istanbul 148 Lisbon na Prague 151
9 Lisbon 98 Istanbul 130 Lisbon 145 Prague na Lisbon 149
haul stopovers, 3) short fuss-free urban
10 Beijing 96 Prague 118 Copenhagen 138 Seoul 137 Seoul 142
getaways, 4) events attendance, 5) gaming
Source: International Congress & Convention Association – Annual country and city rankings
SINGAPORE
MAINTAINING COMPETITIVE INFRASTRUCTURE REMAINS KEY

MIND THE HUB
Changi Airport commercial aircraft movement Geographic-location advantages combined with the
government’s focus on maintaining a globally
(‘000) Commercial aircraft movement Growth (RHS) (YoY%)
competitive transport infrastructure have propelled
450 25
growth of its air hub, Changi Airport.
400 T4 20
SARS and subsequent low base effect growth
350 15 Commercial aircraft traffic through Changi Airport
300 grew 2.3x or at 8.9% CAGR in the past decade,
T3 10
250 BT outpacing visitor arrivals.
5
200
0 Changi Terminal 4, operational since 4Q17, lifted the
150 T2
100 (5) hub’s passenger capacity by almost 20m to 85m. Jewel
50 (10) Changi, a mixed-use development, with gardens and
0 (15)
other attractions was opened in April 2019.
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
Changi Terminal 5, the next phase of expansion
expected to be completed around 2025, will further
Source: CEIC
raise handling capacity to c.125m passengers.
Changi Airport est. passenger capacity Transit & residents as % of total pax
(m pax) But competition is increasing with expansion at Kuala
T1 T2 BT (%) Transit & Residents/Total
Lumpur and Bangkok, and upgrading at other regional
140 125 60
T3 T4 T5 cities too in recent years. As a result, Changi
120 passenger growth has slowed and the proportion of
50
100 85 40 transit traffic stagnated in the past 2-3 years.
40 SARS
80 73 66
16 16
51 30
60 22 22 22
22
7 7 20
40 23 23
23 23 23 23 23 23
20 10 TAKEAWAY
21 21 21 21 21 21 21 24 24
0 -
Changi is still the largest air hub in Southeast
Jan-90
Apr-92
Oct-96
Jan-99
Apr-01
Oct-05
Jan-08
Apr-10
Oct-14
Jan-17
Jul-94
Jul-03
Jul-12
1985
1990
1995
2000
2005
2010
2015
2020
2025E
Asia but facing intensifying competition from

Source: Maybank Kim Eng, Changi Airport Group Source: Maybank Kim Eng, Changi Airport Group, CEIC
neighbouring countries.
SINGAPORE
THE DISRUPTION THREATS TO THE HUB

ULH / LCCs: GAME CHANGERS TO TRAFFIC FLOW?
Range of major current production aircraft (longest range variant) Next-gen aircraft like B787-9 Dreamliner and A350-900ULR
First flight (and B777X soon) capable of non-stop ultra-long-haul
2020 Boeing 777X flights have raised market concerns whether air traffic
2017 Airbus A330neo flow at aviation hubs may be severely affected.
2014 Boeing 737max Green=Widebody
Grey=Narrowbody
2014 Airbus A320neo We opine there may be modest disruption on selective
2013 Airbus A350 routes through Singapore (the ‘Kangaroo’ hop from
2013 Airbus A220 Australia to Europe in particular). But impact on other
2010 Boeing 747-8 routes is likely limited as they are in operation already.
Approx. 20 hours
2009 Boeing 787 flying time
2005 Airbus A380 LCCs pose a greater threat to hub traffic disruption in our
2003 Boeing 777 view. They use more point-to-point networks compared to
1997 Boeing 737NG a typically hub-and–spoke dominated network for FSCs.
1995 Boeing 767
1992 Airbus A330 Southeast Asia’s LCC fleet has seen exponential growth in
Airbus A320
1987 Kms the past decade and accounts for more than 50% capacity
family
- 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 share in most of the countries now. Demand growth, while
Source: Boeing, Airbus, Aerospace Technology, Maybank Kim Eng
strong, has been outpaced by capacity in recent years.
Southeast Asia aircraft fleet (2018) Southeast Asia LCC fleet growth Backlog of all new aircraft orders, led by LCCs, is almost
as large as the operating fleet. With rising challenges to
2,500 1,000 deploy new capacity profitably on existing routes, LCCs
2,044 900 may start targeting more mid-and long-haul routes
2,000 800 2x traditionally serviced by FSCs.
1,734
700
1,500 600
500
895
1,000 400 795
690 TAKEAWAY
300 586 627
200 447 519
500
171 100 Singapore may see modest negative impact
-
- on air traffic from next-gen ULH aircraft
2013
2014
2015
2016
2017
2018
2019E
Operating Storage On order

but the risk from the exponential growth in
Source: CAPA Source: CAPA, Boeing, Airbus, Maybank Kim Eng regional LCC fleets is much greater.
SINGAPORE
HOSPITALITY REITS
RECOVERY FROM THE LONGEST DOWNCYCLE
Singapore hotel room occupancy between 2014 to 2019 Strong visitor growth so far has pushed hotel room
2014 2015 2016 2017 2018 2019
occupancy to a 5-year high in 2018, with momentum
(%)
sustained into Jan-Feb 2019, at 84.3-87.8%.
92.6 91.8
94
The sector’s recovery will be strengthened by easing
87.8 supply, as new hotel rooms are expected to slow to a
89
85.6 85.1 86.0 1.3% CAGR in 2018-21E from 5.5% in 2014-2018.
84.3 84.5
84
80.4 We forecast 5-6% RevPAR growth for 2019-20E,
preferring hotels to serviced residences.
79
DPU levers could arise from overseas investments,
74 mostly de-risked through master leases and minimum
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec rent guarantees, with stronger deal momentum in
Source: STB Europe given positive carry from low cost of capital.
New room supply and occupancy The sector offers both growth and yield.
New supply Occupancy - RHS (%)
10,000 95
8,000 90
85
6,000
80
4,000
75
2,000 70
TAKEAWAY
0 65 Hotels should have stronger pricing power
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019E
2020E
2021E
for the next three years against contracting

supply.
Source: STB, Maybank Kim Eng
SINGAPORE
AVIATION SERVICES
MORE THAN JUST SG VISITOR DEPENDENT
Visitors & pax movement vs. SATS, SIE revenue growth Perceived to be closely related to visitor activity, SATS
(YoY %)
Gateway and SIA Eng line maintenance revenues are
Visitor arrivals Changi pax movement actually quite resilient to visitor growth downturns.
20 SATS Gateway revenue SIE Line maint. Revenue During the six consecutive quarters of visitor declines
starting early 2014 by 0.3-6.1% YoY, revenues for these
15 segments grew between 1.1-5.3%.
10 SATS Gateway and SIA Eng line maintenance revenues

appear quite resilient to Changi passenger growth too,
5 albeit lesser so than visitor volumes.
0 We surmise the factors for this for both companies are:

Dec-12
Mar-13
Dec-13
Mar-14
Dec-14
Mar-15
Dec-15
Dec-15
Mar-16
Dec-16
Mar-17
Dec-17
Mar-18
Dec-18
Jun-12
Sep-12
Jun-13
Sep-13
Jun-14
Sep-14
Sep-15
Jun-16
Sep-16
Jun-17
Sep-17
Jun-18
Sep-18
(5) 1) Increasing scope of services with customers given
scale advantages;
(10)
2) Growing operating fleet in the region mitigating the
Source: Companies, Maybank Kim Eng
volatility of visitor and passenger volumes; and
SATS, SIA Eng estimated enlarged revenue breakdown by entity location 3) Better diversification of Singapore-centric
Other operations in recent years.
SATS countr SIA Eng
ies
11%
Other
countri
es
34% Singap
ore
66%
Singap
TAKEAWAY
ore
89% SG’s aviation services companies arguably
better equipped to deal with visitor volatility
than other tourism-related segments of
Source: Maybank Kim Eng, Companies
hospitality, retail, entertainment etc.
SINGAPORE
SG INTEGRATED RESORTS
SGD9B VITAMIN SHOT MAY LIFT LONG-TERM OUTLOOK
Singapore IR VIP gross gaming revenue (SGDm) Singapore IRs VIP gaming revenue has not recovered to
Marina Bay Sands Resorts World Sentosa
pre-2014 high. This is largely due to Chinese capital
1,400 controls imposed in 4Q16 preventing Chinese VIPs from
1,200 transferring RMB out of China.
1,000
800 Singapore IRs mass market gaming revenue has been a
lot more resilient as it is more locals based. That said,
600
casino entry levy fee for locals has been raised by 50%
400 which may deter local visits.
200
0 Singapore IRs will have to pivot towards foreigners but
will not be easy as Singapore is not an inexpensive
1Q10
3Q10
1Q11
3Q11
1Q12
3Q12
1Q13
3Q13
1Q14
3Q14
1Q15
3Q15
1Q16
3Q16
1Q17
3Q17
1Q18
3Q18
destination and regional competition is increasing.
Source: Genting Singapore, Las Vegas Sands, Maybank Kim Eng

A recently announced investment plan of up to SGD9b
combined for Genting Singapore and Marina Bay Sands
Singapore IR mass market gross gaming revenue (SGDm) could potentially catalyse a tourism uptick in 3-5
years.
1,200 Marina Bay Sands Resorts World Sentosa
The investment phase should be beneficial for
1,000 construction, banks, building materials and consumer
staples sectors.
800
600
TAKEAWAY
400
Rising regional competition and very
200
sensitive to Chinese capital controls,
0 especially the VIP market. Major investment
1Q10
3Q10
1Q11
3Q11
1Q12
3Q12
1Q13
3Q13
1Q14
3Q14
1Q15
3Q15
1Q16
3Q16
1Q17
3Q17
1Q18
3Q18
plan could improve long-term prospects.

Source: Genting Singapore, Las Vegas Sands, Maybank Kim Eng
SINGAPORE
SINGAPORE STOCKS EXPOSED TO THE TOURISM SECTOR

HOSPITALITY AVIATION SERVICES & AIRLINES CONSUMER & GAMING
CDL Hospitality Trust SATS Genting Singapore
Far East Hospitality Trust SIA Eng SPH REIT
Ascott Residence Trust Singapore Airlines Starhill Global REIT
Frasers Hospitality ST Engineering Jumbo Group
BBG Price Mcap 3M ADV TP P/E (x) DY (%) ND/E (x) ROE (%)
Company Rec Act FYE
Code LC (USDb) (USDm) LC FY1 FY2 FY3 FY1 FY2 FY1 FY1 FY2
ART SP Ascott Residence 1.21 1.9 2.5 Hold 1.25 47.2 14.8 14.2 13.9 6.0 6.2 0.5 5.4 5.4 Dec
CDREIT SP CDL Hospitality 1.61 1.4 2.0 Buy 1.80 17.7 15.6 14.8 14.0 6.0 6.3 0.5 6.2 6.2 Dec
FEHT SP Far East Hospitality 0.66 0.9 1.2 Buy 0.80 17.2 14.9 13.9 13.6 6.7 7.2 0.6 4.8 5.1 Dec
FHT SP Frasers Hospitality 0.74 1.0 0.4 Buy 0.85 18.5 14.2 13.5 13.0 6.6 7.0 0.5 5.5 5.4 Sep
SATS SP SATS 5.32 4.4 5.9 Buy 5.80 25.1 22.0 19.0 17.2 3.7 4.1 (0.1) 15.9 17.4 Mar
SIE SP SIA Eng. 2.54 2.1 0.6 Buy 2.85 21.3 19.5 16.9 16.4 4.7 5.1 (0.3) 9.7 11.0 Mar
SIA SP Singapore Air 9.74 8.6 7.4 Buy 11.20 16.3 13.7 13.2 16.4 4.7 4.9 0.4 5.4 6.2 Mar
STE SP ST Eng. 3.98 9.1 10.2 Buy 4.30 20.6 19.0 16.1 14.1 4.5 5.3 0.3 28.0 31.3 Dec
GENS SP Genting SG 0.97 8.6 25.2 Hold 1.12 15.4 16.2 17.0 16.2 3.6 3.6 (0.5) 8.9 8.2 Dec
SPHREIT SP SPH REIT 1.04 2.0 0.7 Hold 1.05 21.7 18.6 17.9 17.3 5.4 5.7 0.3 11.6 10.0 Aug
SGREIT SP Starhill Global REIT 0.75 1.2 1.4 Hold 0.70 16.0 15.3 15.3 15.3 6.3 6.3 2.3 5.2 5.2 Jun
JUMBO SP Jumbo Group* 0.42 0.2 0.1 NR NA 21.0 19.4 17.0 17.1 3.6 4.2 (0.8) 19.4 20.5 Sep
* Bloomberg consensus
Source: Maybank Kim Eng
THAILAND
THAILAND
Maria Lapiz (66) 2257 0250 maria.l@maybank-ke.co.th
AMAZING THAILAND – PAST A NUMBERS GAME

One can trace the beginnings of Thai tourism to the Vietnam war. But it
was the Amazing Thailand campaign launched in 1995 which led to
tourism growth of over 5% pa. This has accelerated to 11% pa from 2010.
Over the years, the country saw epidemics (SARS), economic crises,
intermittent political instability and accidents but traffic numbers have
been resilient, crossing the psychological 30m mark in 2015.
AMAZING THAILAND – PRESENT MONEY, MONEY, MONEY

The next target is 41m guests in 2019, to be led by China, ASEAN and
India.
The sector is now the largest exporter, generating THB2t of revenue and
nearly 50% of Thailand’s current account surplus.
But resources are starting to get stretched: ecological breakdown of coral

reefs, smog in main cities and garbage pile-up at top island destinations
AMAZING THAILAND – FUTURE MORE IS MORE

50m guests and THB3t revenue are within reach BUT more investments
are required to enhance already-efficient basic infrastructure and
facilities before they become bottlenecks.
Multiple investment opportunities are emerging and private sector can UNESCO WORLD HERITAGE SITE IN THAILAND
participate as it has in the past 20 years. Investment opportunities via Dong Phayayen-Khao Yai Forest Complex
listed companies are also available but valuations are pricing in high
expectations, so the investment horizon would have to be long.
THAILAND

INTERNATIONAL TRAFFIC HAS BEEN RESILIENT
Tourism traffic through the years Thailand’s tourism industry effectively began with the
Vietnam War (1960-1975). Pattaya was the R&R
(M persons) destination for American soldiers stationed in
Vietnam.
45 CAGR = 5.96 CAGR = 5.13 CAGR = 11.69
Visit Thailand Year in 1987/88 ignited tourists’
Free visa-on-arrival
40 interest.
Trade war
35 Boat accident A Central Bank meeting in 1992 and the opening of the
country as an investment destination following the
Bomb blast creation of Bangkok International Banking Facility
30
(BIBF) spurred The Ten Year Amazing Thailand
25 Campaign, in 1995.
Political crisis Military coup
The rest is history.
20
Amazing Thailand
15
Financial SARS
Lost in Thailand movie
crisis
10
5 Tsunami
0
90 92 94 96 98 00 02 04 06 08 10 12 14 16 18
Source: MOTS, BOT, MKE

TAKEAWAY
Beginnings of tourism tied to economic and
business interests.
THAILAND

GROWING
30m psychological mark was hit in 2015 Then traffic built up for other reasons:
Others USA Russia India
(M persons) • Better income, ease of travel and ease of travel
Japan Korea Malaysia Other ASEAN
45 arrangements.
40
35 • Evolution of product offerings, from One Night In
30 Bangkok experience to a travel destination for
25 families.
20
15 • Rediscovery of shared roots and cultural identities.
10 Core ethnicities of modern-day Thais: Chinese,
5 Malays and Indians.
0
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
Source: BOT, MOTS
One trillion revenue in 2013
Others USA Russia India

(THBb)
Japan Korea Malaysia Other ASEAN
2,500
2,000
1,500
1,000 TAKEAWAY
500 ASEAN, China are the main source of
0
tourism traffic. ASEAN’s 10Y CAGR is 11%.
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
Source: BOT, MOTS
THAILAND

FOR CHINESE, IT WAS THE MOVIE; FOR ASEAN, A REDISCOVERY
Lost in Thailand movie started the yellow fever Traffic between Thailand and its southern and
northern neighbours has just re-emerged
14 (M persons) 12 (M persons)
CAGR = 33.12 CAGR = -0.45 CAGR = 33.59 CAGR = 4.87 CAGR = 7.48 CAGR = 11.16
12 Free VOA 10
Trade war
10 Boat accident 8 Trade war
Bomb blast
8
Bomb blast 6
6 Visit Thailand year Tsunami
SARS Military coup
4 Amazing Thailand
4 Amazing Thailand Political crisis Military coup Political crisis
2 Fin"l crisis Tsunami 2
SARS Low cost airline
Lost in Thailand
0 Economic crisis
0
90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18
Source: BOT, MOTS Source: BOT, MOTS
FOR INDIA, IT IS MICE

Indians were in the first economic migration wave. Now, the
flow is driven mainly by business
2.5 (M persons)
CAGR = 6.46 CAGR = 13.00 CAGR = 11.19
2.0 Free VOA TAKEAWAY
Trade war
Boat accident
1.5
Bomb blast
China, ASEAN and India contributed 59% to
1.0 2018 traffic, 49% of revenue.
Political crisis Military coup
Amazing Thailand
0.5 SARS Next surge is expected from India.
Fin"l crisis
signed FTA
Tsunami
0.0
90 92 94 96 98 00 02 04 06 08 10 12 14 16 18
Source: BOT, MOTS
THAILAND

MAJOR SOURCE OF REVENUE
Tourism contributions to GDP doubled in just over a decade Tourism contributions to GDP doubled in 10 years to
(THBb) (% of GDP) 12% by 2018, on a nominal basis.
18,000 12% 14%
12%
16,000 11% Tourism receipts rose 3.5-fold over the period, driven
11% 12%
14,000 9% by traffic…
9% 10%
12,000 8%
7% 8% … and average tourist spending. Strategies must focus
10,000 6%
16,316
5%
15,452
5% on both traffic and product offerings.
14,555
13,743
8,000
13,230
6%
12,915
12,357
11,307
10,808
6,000
9,707
2,008
9,659
1,831
1,633
4%
1,457
1,207
1,173
4,000 Unlike many tourism programmes in ASEAN, Thailand
984
776
593
575
510
2,000 2% has no dependency on gambling.

0 0%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
N-GDP Tourism receipt % of N GDP
Diversified product offerings bring in traffic and raise average spending

60,000 15%
(THB/trip)
55,000
10%
50,000
45,000 5%
2.5%
40,000
35,000 0%
TAKEAWAY
30,000
-5%
25,000 Tourism can be considered Thailand’s
20,000 -10% largest export, followed by auto
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019E
(THB0.93t) and electronics (THB0.63t)

Average spending per tourist in 2018.
Average spending per tourist - %chg YoY (RHS)
THAILAND

TOURISM ALSO MAJOR SOURCE OF FOREIGN
CURRENCIES
Services balance (mainly travel receipts) is key support for current account Once dependent on the Chinese, other nationalities
are starting to contribute more to travel receipts.
(USD b) Trade balance Services balance - mainly travel receipts
25 High crude prices
High crude prices but In addition to the country’s many positive cultural and
20 also strong exports came with weak social attributes, diversification of product offerings is
exports
15 key to traffic and spending:
10 1.3m MICE events targeted in 2018 to generate

5 THB110b revenue by Thailand Convention & Exhibition
Bureau (TCEB) and Thailand Incentive & Convention
0
Association (TICA).
-5
-10 • MotoGP has been added to muay thai, yatch
tournaments, polo and golf tournaments.
1Q05
3Q05
1Q06
3Q06
1Q07
3Q07
1Q08
3Q08
1Q09
3Q09
1Q10
3Q10
1Q11
3Q11
1Q12
3Q12
1Q13
3Q13
1Q14
3Q14
1Q15
3Q15
1Q16
3Q16
1Q17
3Q17
1Q18
3Q18
Expansion to marathons, triathlons and cycling
Source: BOT next.
Non-Chinese tourists have started contributing to travel receipts • Trade expos and beauty pageants are also
targeted.
(M persons) (USD b)
Non-Chinese tourist arrivals
12 20
Chinese tourist arrivals 18
10 16
Travel receipt 14
8
12
6 10
8
4 6 TAKEAWAY
2 4
2
0 0 Marketing and promotional campaigns like
targeted waiver on VoA to bring in traffic.
1Q07
3Q07
1Q08
3Q08
1Q09
3Q09
1Q10
3Q10
1Q11
3Q11
1Q12
3Q12
1Q13
3Q13
1Q14
3Q14
1Q15
3Q15
1Q16
3Q16
1Q17
3Q17
1Q18
3Q18
Source: BOT, MOTS
THAILAND
AMAZING THAILAND - PRESENT MONEY, MONEY, MONEY

VISITORS BY THE NUMBER
Basic profiles of international visitors
First Repeat Package Non
By Nationality Male % YoY Female % YoY Visit % YoY Visit % YoY Tour % YoY Package % YoY
East Asia 44.2% 16.2 55.8% 19.6 37.3% 17.5 62.7% 18.3 33.0% 34.8 67.0% 11.1
Europe 48.5% 6.1 51.5% 19.9 24.9% -7.9 75.1% 21.8 21.0% 18.9 79.0% 11.2
Americas 49.0% -28.2 51.0% 14.9 33.5% -33.6 66.5% 3.8 9.0% 11.2 91.0% 5.4
South Asia 54.7% -45.1 45.3% 49.2 37.6% 36.3 62.4% 14.1 31.0% 18.8 69.0% 13.2
Oceania (incl Aus/NZ) 51.6% -6.5 48.4% 15.6 18.6% -15.0 81.4% 7.3 7.0% -38.9 93.0% 8.3
Middle East 54.8% -29.9 45.2% 0.3 27.6% -11.1 72.4% 0.1 21.0% 1.9 79.0% -5.0
Africa 46.4% 6.9 53.6% 13.0 31.8% 41.2 68.2% 4.2 14.0% -13.9 86.0% 9.5
Total 46.2% 10.3 53.8% 19.8 33.7% 10.9 66.3% 17.5 29.0% 29.2 71.0% 10.4
Source: MOTS
Days of Stay Age Group
Mostly repeat visitors; who spend 15% more than first-time visitors. Days under 25 17%
East Asia 6.7 25-34 28%
Mostly on non-package tours, especially those from Americas, Oceania and Europe 17.0
35-44 18%
Africa. Americas 15.0
45-54 16%
South Asia 7.5
55-64 13%
Mostly women, especially from East Asia, South Asia and the Middle East. Oceania 13.9
Middle East 12.3 over 65 9%
Spending: men spend slightly more than women. Africa 13.0 Visit Frequency (%)
Total 9.7
First Visit 33.7%
Millennials are the largest group, especially from Americas and South Asia.
Income Level Repeat Visit 66.3%
Majority have income of USD20-60k. Accommodation, shopping and F&B are no income 8.1% Non Package 71.4%
the largest spending categories. over USD60K 6.8% Package Tour 28.6%
USD20-60K 48.8% Male 46.2%
East Asians are the highest spenders, followed by Middle East; Europeans are Under USD20k 36.3% Female 53.8%
the lowest. Source: MOTS
Europeans stay the longest, followed by Americas; East Asians the shortest. TAKEAWAY
Investment in Big Data analysis can help fine-
tune short-term marketing strategies.
THAILAND
AMAZING THAILAND - PRESENT MONEY, MONEY, MONEY

TRAFFIC COMES BUT PRODUCT OFFERINGS
MUST DIVERSIFY
Miscellaneous
Spending breakdown Medical care, In the early years, entertainment was a big slice of the
, 1.5%
Local 1.5% Accomodatio pie.
Transport, n, 28.3%
10.0%
Sightseeing, Shopping is now a bigger part.
4.1%
F&B and medical care are becoming more prominent.
F&B can include home-stay proposition.
Entertainmen
t, 9.2% Medical care is diversifying into IVF clinics.
Shopping,
24.5%
F&B, 20.9%
Source: MOTS
Safari World – with

the largest herd of
giraffes in Asia
TAKEAWAY
Diverse product offerings a must to capture
traffic, especially families.
Example: Thailand’s Safari World is known as

the largest open safari in the world.
Source: Company
THAILAND

RESOURCES STARTING TO GET STRAINED
Ecology at the famous Maya Bay in Koh Pi Ley Smog created by PM2.5 pollutants recurring Garbage situation getting out of control,
has deteriorated so badly, it has been closed and occurring in more cities. especially in destinations like Samui Island.
indefinitely.
Source: MOI, MKE, Google
TAKEAWAY
ESG – ecology, smog, garbage - needs
immediate attention and investments.
THAILAND
AMAZING THAILAND – FUTURE: MORE MEANS MORE

FRANCE CAN BE THAILAND’S MODEL
French
Riviera
In 2017, France welcomed 86.8m visitors,

Thailand 79% were Europeans. 7Y CAGR was 1.8%
Riviera
In 2018, Thailand welcomed 38m visitors,
“plan” 79% were Asians.
TAKEAWAY
Thailand can match France within 10 years
Source: Google maps, Office of the Prime Minister in terms of traffic.
THAILAND

FIRST 50M, NEXT 100M
Projection: 50m visitors achievable by 2021/22, next target 100m Accelerated growth in international traffic and
revenue.
CAGR = 8.41 Base Case
(M persons) CAGR = 5.13 Pessimistic
140
CAGR = 11.69 Optimistic Revenue growth is faster than traffic growth, as
120 CAGR = 5.9 CAGR = 5.13 CAGR = 11.69 LT CAGR = 4.9 spending per day is rising and length of stay is
100
marginally longer.
80 Free VOA Under various scenarios, 50m traffic can be achieved

Trade war
60 Political crisis Boat accident by early 2020s.
Bomb blast traffic to hit 50m by
40 Amazing Thailand
Military coup -2021 optimistic case
Fin"l crisis
Tsunami THB3t revenue can be achieved in the next five years.
-2022 base case
20 SARS
0 Lost in Thailand At a long-term growth assumption of 5%, traffic could

90 95 00 05 10 15 20E 25E 30E 35E hit 100m in 2035 and revenue, closer to THB7t.
Source: MOTS, MKE-estimates
Projection: THB3t revenue in next 5 years; at 100m, THB7t revenue is possible

CAGR=11.85 Base Case
(THBb)
8,000 CAGR = 7.27 Pessimistic
CAGR = 16.44 Optimistic
CAGR = 10.13 CAGR = 7.27 CAGR = 16.44 LT CAGR = 4.9
6,000
Free VOA
4,000
Trade war
Political crisis
Boat accident tourism revenue can hit
TAKEAWAY
Amazing Thailand Bomb blast
2,000 Tsunami Military coup THB3t in the next five
years High targets look achievable.
Fin"l crisis SARS
0 Lost in Thailand
90 95 00 05 10 15 20E 25E 30E 35E
Source: BOT, MOTS, MKE estimates
THAILAND

STRATEGY MUST INCLUDE INFRASTRUCTURE
ENHANCEMENTS
Programmes to enhance infrastructure
Investment budget
Projects (THB b) (USD b)
Land 2,023.7 61.3
Air 163.9 5.0
TAKEAWAY
Coastal 151.4 4.6
Medium-term infrastructure improvements
Electricity 38.1 1.2
Water 0.8 0.0
to support 50m guests.
Rail 375.8 11.4
Total 2,753.8 83.4 Investment cost USD83b, open to PPP.
Source: BOT, MOC, DOA
THAILAND

STRATEGY: ESPECIALLY AIRPORTS
AOT’s airport capacity plan and investment cost Utilisation rates of airports
(THB m) 2017 2021 2022 2025 2026 2030

Phuket Airport
Capacity 6.5m ->12.5m 12.5m ->18m 18m ->25m
Cost 5,790 2,700 12,000
Hat Yai Airport
Capacity 2.5m ->6m 6m ->10m
Cost 9,500 5,600
Chiang Mai Airport
Capacity 8m ->18m 18m->20m
Cost 9,200 1,800
Chiang Rai Airport
Capacity 3m ->3.3m 3.3m ->3.7m 3.7 ->4m
Cost 3,700 600 1,900
Suvarnabhumi
Airport Source: DOA
Capacity 45m ->90m 90m ->105m 105m ->120m
Cost 115,660 na na
Don Mueang Airport
Capacity 30m ->40m
Cost 32,000
Total pax throughput 92 137 155 197 212 246
Capacity
Total Inv Cost 5,790 62,700 2,700 63,600 9,300 TAKEAWAY
DOA's airport development plan
AOT is the sole investor in international
Regional airport development (Mae Sot/Bae Tong/Sakon Nakhon/Krabi) with total investment of THB7,260m airports.
Develop Khon Kaen passenger terminal - Total investment THB2,145m
Source: AOT, DOA Investment opportunities open in domestic
airport upgrades.
THAILAND

STRATEGY: TO ENHANCE INTERNAL CONNECTIVITY
Air Asia’s Air Asia (AAV) is the fastest-growing LCC for internal
domestic routes. It controls 30% of the domestic market.
network
Bangkok Airways (BA) also has concessions to operate
Samui Airport, Tak Airport & Phitsanulok, in addition
to airlines.
Nok Air, another operator of LCCs and charter flights,

is financially struggling and is seeking new investors
after AAV’s attempt to acquire the company
encountered push-back on monopoly fears. Nok
controls 20% of the domestic market.
Bangkok Airways
TAKEAWAY
Any next destination is an hour away by air.
Nok Air needs new investors.

Source: AAV, BA
THAILAND

STRATEGY: DIVERSIFY DESTINATIONS
8 cluster provinces identified to diversify and enhance visitor experience The Thai Riviera (plan)
Source: MOTS
Next move is to promote clusters of provinces to offer

a variety of experiences. Also to ease the burden on
prime destinations such as Bangkok, Pattaya, Phuket,
Krabi & Chiang Mai. A tertiary objective is to spread
out economic benefits.
TAKEAWAY
Now that tourism is firmly a part of the
Source: AOT, DOA
economy, resource allocation, diversification
and income distribution have to be addressed
under the banner of “SUSTAINABILITY”.
THAILAND

STRATEGY – ACCOMMODATION
2017 hotel rooms - Western, 7% Based on registered hotel rooms, guest to room ratio
743k, 9% 5Y CAGR was 52 in 2018.
Northeaster
n, 11% BKK &
Based on nine days of stay on average, this implies 70-
Vicinities, 75% utilisation rates.
23%
Given pronounced seasonality, occupancy would hit
Northern,
14% 80-85% at prime tourism destinations during high
Southern, season. This could be pushing the limit for good
28% quality service.
Eastern,
15%
Source: BOT, MKE, Companies Hotel occupancies
Year Peak Low
Occupancies
Avg (Nov/Feb) (Jul/Sep)
K sqm hotel construction areas permitted Nationwide 73.8 81.3 64.6
2,500 Central Region incl BKK 76.6 83.8 73.2
1,985 1,923 South 73.9 79.6 63.2
2,000 1,777
1,644 North 70.5 79.4 53.7
1,500 1,267 Source: BOT
1,000
TAKEAWAY
500
There is room for hotel assets to grow
- further.
2013 2014 2015 2016 2017
BKK & vicinities Northern Central Eastern Northeastern Western Southern

Dispersion of destinations opens
opportunities to boutique hotel operators,
Source: BOT, MKE, Companies new hotel chains.
THAILAND

STRATEGY – HOTEL FACILITIES
Domestic revenue of big listed hotel operators Big listed players, MINT, CENTEL, ERW, DTC, are
already present everywhere: BKK & vicinities, South,
(THB b)
East and North.
80
70 59.6 Their further expansion is paced by capital limitations,
56.9
60 52.2 53.1
4.8 typically capped at 1x net gearing.
45.6 4.8 6.1
50 4.7 4.7 6.0
4.5 5.3 5.6
40 4.2 17.7 ADR and RevPar continue to increase.
15.3 15.7 16.2
30 14.2
20
27.0 27.1 29.9 30.9
10 22.7
0
2014 2015 2016 2017 2018
Source: Companies, MKE MINT CENTEL ERW DTC
Room rates per night
(THB/room/night based on BOT)

2,000 1,710 80%
1,613
1,471 78%
1,500 1,205 1,221 76%
1,104
985 74%
71.40%
1,000 785 72%
68.5% 70%
67.0% TAKEAWAY
500 68%
65.1%
66%
- 64% Rising occupancy is supportive of new
2015 2016 2017 2018 investments
ADR RevPar OCC
Source: BOT, Companies, MKE
THAILAND

POINTS OF ENTRY FOR INVESTORS
Investment costs for healthcare and hotels Broad-based growth prospects strong. Multiple
sectors where foreign investors can invest in:
Cost per bed - healthcare (THB m) Cost per key - hotels (THB m) • Hotel services
• Managed health care for the aged and those with
Primary no beds Luxury 12-15 degenerative diseases
• Restaurants
Secondary care 5-7 Mid-scale 4-5
• Entertainment, sports (MotoGP, Muay Thai, a
Tertiary care 7-10 Economy 2-3 Marijuana Joint now on its way of being legalised)
• Commerce, mainly big retailing, but this is very
Wellness Spa 1.0-1.5 Budget 0.7-0.8 competitive. Large retail chains such as Central
Group, Mall Group, TCC Group, CP Group and
Source: Companies, MKE
others have already opened branches in the
primary and key tourism cities
Economics of hotel investments by grade Hotel services are the most lucrative and easier to
enter as there are already many global players in the
Capex Average Occupancy EBITDA Payback sector. Lower-priced hotels have higher IRRs and
NPV IRR
per key Room Rate rate margin period shorter payback periods. Typical lease is 30+30 years.
(THB m) (%)
(THB m) (THB) (%) (%) Years
We are also noting that Wellness Spas have the fastest
Luxury 12 7,000 80 35 282 9 15 payback of 3-5 years based on SPA’s experience
Managed healthcare is another potential growth area
Midscale 4.5 4,000 80 35 380 12 12 but this is more greenfield with uncertain payback
periods.
Economy 2.5 1,200 85 45 178 12 12
Budget 0.8 500 90 50 87 13 11

TAKEAWAY
Notes: EBITDA margins incl F&B, Current Avg Room Rate, COF 4%, COE 12%
Source: MKE, Companies Hotel services and wellness spas are
recommended for direct investors
THAILAND

MANAGED HEALTHCARE
3 listed hospitals with significant international patient revenue Thailand is the regional leader in medical tourism. It
has 66 JCI accredited hospitals.
(THBb)
40 35.3
35 32.6 There are increasing IVF specialised clinics catering to
30.3 0.8
29.0 0.3 Chinese couples. This adds to its reputation for sex-
30 24.7 0.1 0.2 12.0
11.6 change operations that is quite well-known globally.
25 11.4
11.4
20 9.5
Managed healthcare for the aged is also lucrative
15
22.6
because it can draw on Thailand’s ageing society for
10 18.7 20.7
15.2 17.4 underlying traffic.
5
0 Some areas have become retirement spots such as Hua
2014 2015 2016 2017 2018 Hin, Chiang Mai, Kanchanaburi and Chantaburi.
BDMS BH BCH (WMC)
Source: Joint Commission International (JCI)
Ongoing projects in managed care

Jin well-being County (THG) Project 1 - JV with THB4,400b
Thonghe Group (Chinese -
Hospital Operator)
WEGO (Chinese - Medical Device
Producer)
Ga Mone Pwint (Real Estate)
Potential targeted IRR 8-10%
Phase 2
Residential for elderly Not yet disclosed
TAKEAWAY
Community Mall/Residential
(VIBHA) Ownership Structure 2,000 rai secured Thailand has a track record in medical
For the Elderly Welcome JV partners 3.2m sq m
Potential targeted IRR > 15%
tourism and will likely lead in managed
healthcare.
BDMS Wellness Clinics 100% owned by BDMS THB12b; THB10b for land
Potential targeted IRR 12%-13%
Source: Companies, MKE
THAILAND

WIDE ARRAY OF INVESTMENT CHOICES ON SET
ROE/EPS Growth valuation metric According to ROE/EPS Growth valuation, we categorise
BDMS, BCH, CPALL, CPN and SPA as POWERHOUSES due
to their strong ROEs in a high-growth industry.
Stocks with strong future prospects include MINT,

ERW, STEC, PR9 and EKH
TAKEAWAY
Source: Bloomberg, MKE Based on ROE/EPS growth, we have an eye on
BDMS, BCH, CPALL, CPN and SPA, MINT, ERW,
STEC, PR9 and EKH.
THAILAND

MORE CHOICES ON SET BASED ON P/E AND P/BV
PBV/ROE From a further screening of stocks based on P/E and

valuation P/BV, undervalued stocks include SCC, STEC, CPN,
MINT, EKH, ERW and PR9.
PE/Earnings
Growth
valuation
TAKEAWAY
On short-term metrics like P/BV and P/E, SCC
& STEC also look undervalued, along with
EKH, ERW and PR9.
Source: Bloomberg, MKE
THAILAND
VALUATION TABLE
Stock Bloomberg Mkt cap Rating Price TP U/D Side P/E (x) P/B (x) ROE Div yld (%) Beta
code (USDm) (LC) (LC) (%) 19E 20E 19E 20E 19E 20E 19E 20E 2Y
Hotel
Central Plaza Hotel CENTEL TB 1,841 HOLD 43.5 46.0 5.7 24.7 22.7 3.8 3.3 20.7 20.8 2.0 2.5 0.9
Dusit Thani Public Co Ltd DTC TB 290 NR 10.9 na na 32.1 na 1.9 na 4.8 na 1.4 na 0.9
Erawan Group ERW TB 539 BUY 6.9 9.0 30.4 27.9 23.2 2.9 2.6 10.9 12.0 1.1 1.3 1.5
Minor International MINT TB 5,465 HOLD 37.5 42.0 12.0 23.9 22.0 2.7 2.5 11.9 11.8 1.3 1.4 1.0
Wellness
Bangkok Chain Hospital BCH TB 1,399 NR 17.6 21.3 20.8 34.4 30.4 6.7 6.0 20.0 20.2 1.6 1.8 0.9
Bangkok Dusit Med Service BDMS TB 12,400 BUY 25.3 30.0 18.8 35.0 30.1 4.7 4.3 20.4 15.1 1.4 1.7 0.5
Bumrungrad Hospita BH TB 4,066 BUY 178.5 230.0 28.9 33.0 29.6 6.1 5.4 23.4 23.0 1.8 2.0 0.7
Ekachai Medical Care EKH TB 113 NR 6.0 7.6 27.9 27.0 22.9 3.8 3.5 14.7 15.7 3.0 3.2 0.8
Praram 9 Hospital PR9 TB 266 NR 10.8 13.1 21.1 28.1 25.5 2.1 2.0 7.6 7.9 1.4 1.6 1.0
Siam Wellness Group SPA TB 254 NR 14.2 15.3 7.9 30.5 25.3 7.3 6.2 24.8 25.7 1.3 1.6 1.4
Shopping/Commerce
Berli Jucker BJC TB 6,398 NR 51.0 59.7 17.1 28.1 25.1 1.8 1.7 6.3 6.8 1.6 1.8 1.1
CP ALL PCL CPALL TB 21,890 NR 77.5 84.0 8.4 30.0 26.2 7.3 6.4 24.6 24.8 1.7 1.9 0.8
Central Pattana CPN TB 10,690 HOLD 76.3 74.8 -1.9 23.7 22.4 4.5 4.0 20.1 18.9 2.0 2.1 0.9
MK Restaurants Group M TB 2,078 NR 70.0 81.6 16.6 22.2 20.4 4.4 4.3 20.0 21.1 4.0 4.4 0.7
Siam Makro MAKRO TB 5,152 BUY 34.3 47.6 39.0 25.2 22.6 8.0 7.2 33.1 33.4 3.1 3.4 1.0
Airlines
Asia Aviation AAV TB 657 NR 4.3 4.9 13.0 23.4 13.2 1.0 1.0 5.0 6.8 3.0 3.5 0.6
Bangkok Airways BA TB 768 NR 11.9 16.3 36.6 57.8 35.5 0.8 0.8 2.0 2.8 1.9 2.6 0.9
Thai Airways International THAI TB 889 NR 12.8 12.8 0.3 -54.2 10.7 1.2 1.1 -8.2 7.6 0.5 1.0 1.5
Construction/Infrastructure
Airports Of Thailand AOT TB 30,669 BUY 68.5 75.0 9.5 35.0 31.1 6.2 5.7 18.6 19.1 1.6 1.8 0.9
Bangkok Expressway & Metro BEM TB 4,934 NR 10.3 11.3 9.4 39.2 33.0 4.2 4.0 10.8 12.5 1.4 1.7 0.9
BTS Group Holdings BTS TB 4,362 NR 11.6 11.5 -1.0 49.2 38.3 3.4 3.1 6.5 7.7 2.0 2.3 0.6
CH. Karnchang CK TB 1,367 BUY 25.5 34.0 33.3 23.9 34.0 1.7 1.7 7.2 4.9 1.9 1.3 1.1
Siam Cement SCC TB 17,225 HOLD 458.0 449.0 -2.0 10.7 9.8 1.7 1.6 16.9 16.6 3.7 4.1 0.9
Sino Thai Engr & Constr STEC TB 1,195 BUY 24.7 34.0 37.7 22.1 17.8 3.2 2.8 15.1 16.8 1.8 2.2 1.3
Note: Valuations of NR (Not Rated) companies are based on Bloomberg consensus.

Share prices are as at 22 Apr, 2019 closing.
Source: Bloomberg, MKE
VIETNAM
VIETNAM
Le Hong Lien (84 28) 44 555 888 lien.le@maybank-kimeng.com.vn
ONE OF THE FASTEST-GROWING TOURIST DESTINATIONS

From mountains to beaches, culture to history, people to food,
safety to affordability, Vietnam has it all for a tourism boom with
exceptionally strong arrival growth of 25% p.a. on avg. during
2016-18.
GROWING AFFLUENCE AND LOW-COST TRAVEL

Higher disposal income, the emergence of Middle and Affluent Class
(MAC) and permission for low-cost airlines led to an 18% CAGR in
domestic travel in 2008-18.
MOST POPULAR AND UP-AND-COMING TOURISM HOTSPOTS

Quang Ninh, Da Nang and Can Tho
EQUITY TOURISM PLAYERS

VJC VN: a driver of tourism growth via its airline services, also
beneficiary of rapid tourism development.
Vinpearl, 1/3 share of 5-star hotels and resorts market in Vietnam.
Saigon Tourist’s upcoming IPO, largest of its kind.
UNESCO WORLD HERITAGE SITE IN VIETNAM

Trang An Landscape Complex
VIETNAM
TOP 10 FASTEST-GROWING TOURIST DESTINATIONS (2017-18)

NO. OF ARRIVALS INCREASED BY 95% IN 2016-18
Vietnam’s foreign arrivals were largest among top 10 fastest-growing International arrivals to Vietnam jumped to 15.5m in
destinations (2017) 2018, more than 3x the 5.1m in 2010.
100% 14
Among top 10 fastest-growing tourist destinations in
80% 12
62.7% the world in 2017, according to World Tourism
10
60% Organisation, Vietnam is the only country with more
8 than 10m foreign tourists a year. It is also the only one
40%
6 that posted strong double-digit growth of international
20% 29.1% overnight visitors for 3 consecutive years up to 2018.
4
0% 2
No. of overnight visitors jumped by 95% in 2016-18
-20% 0
Egypt Togo San Vietnam Georgia Palestine Niue Nepal Israel N. despite relatively low penetration of international
Marino Mariana hotel chains/brands.
2017 Arrivals (Mln-R) 2017/16 2017/15
Source: Tourism Organisation (UNWTO)
Number of foreign tourist arrivals in Vietnam (million)

18
15.5
15
TAKEAWAY
12
Among fastest-growing tourist destinations,
9
growing at >20% p.a. for 3 consecutive years
6 5.1
up to 2018 thanks to unique offerings of
3 2.1 natural landscape, diversified culture, rich
0
history, excellent food on top of safety and
Source:2000
xxx 2005 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018e affordability
Source: Vietnam Tourism Board
VIETNAM

HIGHEST AIR PASSENGER AND INBOUND
TOURISM GROWTH
Highest air passenger traffic growth (2012-17 CAGR) Inbound tourism CAGR during 2012-17 in major ASEAN countries
11%
Japan 2.2%
Australia 2.5% 8.70% 8.60%

9%
Singapore 3.9%
Indonesia 6.90%
4.2% 7% 6.60%
Phillipines 5.0%
New Zealand 5.9% 5%
Malaysia 8.1%
3.10%
India 10.1% 3%
2%
South Korea 10.4%
1%
Thailand 11.1%
China 11.5%
-1%
Vietnam 28.9%
Vietnam Thailand Phillipines Indonesia Singapore Malaysia
Source: Euromonitor, EIU, ASEAN Tourism Forum Source: Euromonitor, EIU, ASEAN Tourism Forum
TAKEAWAY
High inbound tourism CAGR drove robust
air passenger traffic, which increased
28.9% CAGR during 2012-18.
VIETNAM

YET, STILL VERY MODEST PENETRATION OF
INTERNATIONAL HOTEL CHAINS
ASEAN: hotel rooms per 1,000 tourists (2017) Number of hotel rooms in Vietnam per 1,000 tourists
topped ASEAN countries at 39.3.
Rooms per 1,000 tourists
45
However, 80% of them are below 3-star standards. 5-
40 stars and above accounted for only 7.1%.
35
30 Most of the hotel chains are home-grown; penetration
25 of international brands was only 1.4%, the lowest
among major ASEAN markets.
20 37.8 39.3
15
2019-21 may see a change in presence of international
10 18.3 brands. Approximately 5,400 rooms under brands such
12.4 13.4
5 as Ritz Carlton, InterContinental, Westin and Okura
3.7 Prestige etc. will be added, increasing the supply of 5-
0
Indonesia Malaysia Philippines Singapore Thailand Vietnam star hotel rooms by 16%. We expect this to change the
Source: UNWTO, Horwath HTL report
visitor mix more towards Western tourists.
Modest presence of international hotel chains in Vietnam
(%) ASEAN: international hotel chain brands penetration rate

60
50
TAKEAWAY
40
30
Still very modest penetration of
54.9
international hotel chains but this may
20
change in 2019-21 with ~5,400 rooms to
10 16.8 be added, expanding total 5-star hotel
6.5 10.2 6.6 1.4 rooms supply by 16%.
0
Indonesia Malaysia Philippines Singapore Thailand Vietnam
Source: UNWTO, Horwath HTL report
VIETNAM

SPENDING PER TOURIST IS ALSO MODERATE
Average spending by foreign tourists in Vietnam remains low and has declined Low spending per tourist in Vietnam is mostly due to
(USD) its cheaper accommodation, transportation and food
2,000 2015 2016 2017 etc. Affordability has been one of Vietnam’s
attractiveness for foreign travellers.
1,500
Tourist services in Vietnam are still simple, relying on
either natural beauty or historic sites. There are
1,000 limited choices of souvenirs or local specialties to
bring home.
500
Chinese tourists have been increasing, accounting for
nearly 1/3 of foreign tourists to Vietnam in 2018.
-
Vietnam Thailand Indonesia Philippines Singapore Lower spending per visitor during 2016-17 was due to:
Source: UNWTO, Vietnam Tourism Board (1) number of arrivals increasing faster thanks to
better connectivity and visa relaxation; and (2) easing
Growth of tourists from China has outpaced the rest, accounting for 32% of prices for transportation and meals, which are still
international visitors to Vietnam in 2018 bulky in terms of total spending, besides
accommodation.
100%
80%
60%
40% 18.7% 22.5% TAKEAWAY

15.0%
9.0% 13.6%
20%
26.9% 31.1% 32.0% Still very basic tourist services and
23.3% 22.4%
0% products, resulting in lower average
2011 2015 2016 2017 2018e spending by foreign tourists who have
travelled to Vietnam due to improved
China S. Korea Japan Taiwan U.S. Others connectivity and visa relaxation.
Source: UNWTO, Vietnam Tourism Board
VIETNAM

SIMILAR STRONG PICK-UP IN DOMESTIC PASSENGERS
Number of domestic trips taken by Vietnamese… Domestic trips have strongly increased with the
90 appearance of Vietjet Air, Vietnam’s first low-cost
80.0
80 73.0 airline in 2012.
70 60.0 62.0
60
In January 2019, Bamboo Airways, Vietnam’s second
low-cost airline, started commercial flights,
50
35.0 38.5 intensifying competition with passengers benefiting.
40 29.0 32.5
25.0 28.0
30 21.0
16.1 Vietnamese’ disposal income more than doubled in the
20 11.2 past decade. Its Middle and Affluent Class (MAC) is
10
forecast to double over 2014-20 to 33m, by Boston
0 Consulting Group (BCG).
2000 2005 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018e
…enabled by higher disposal income (HCMC monthly income per capita)

(quintile 1 = lowest, quintile 5 – highest)
TAKEAWAY
Higher income, ever-changing lifestyles of
MAC and gov’t permission for low-cost
airlines to operate resulted in an 18%
CAGR in domestic travel in 2008-18.
71
Source: Vietnam Tourism Board, GSO, World Bank
VIETNAM
RISING AFFLUENCE AND LOW-COST TRAVEL

GROWTH IS ENABLED BY MORE HOSPITALITY FACILITIES, NEW
AIRLINES, AS WELL AS OTHER INFRASTRUCTURE
Total revenues from tourism and no. of accommodation suites New accommodation suites increased 15% pa in 2013-17.
This helped to spur tourism.
700 No. of accomodation suites ('000) Revenues (VNDtril)
600 Number of 3- to 5-star hotel establishment grew at 9.8%
during this period, led by strong growth of 5-star hotels
500 (16.5% CAGR).
400
However, presence of 3-5 star hotels is still modest; just
300 about 870 out of over 25,000 establishments, supplying
only approx. 20% of total rooms.
200
Major airports’ designed capacities were raised in recent
100 years, which also helped (e.g. Hanoi’s: 19m passengers
- p.a. from 9m, Hochiminh’s: 25m from 20m, Da Nang:
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 10m from 5m etc.)
Receipts from tourism grew at 24.4% CAGR during 2008-
Number of 3- to 5-star hotel establishments grew at 9.8% CAGR during 2014-17 18, reaching VND620tr or USD27b last year.
1,000 3-Star 4-Star 5-Star
800 118
91 107
600 72 261 TAKEAWAY
64 215 230
159 187
400 Strong pick-up in tourism has been
200 375 381 441 442 490 supported by more hotels and upgraded
airport facilities. Total number of rooms
0
'13 '14 '15 '16 '17 grew by 15% CAGR in 2013-17.
Number of Hotel Establishments (2013-2017)
Source: Vietnam Tourism Board, GSO
VIETNAM

UPSIDE POTENTIAL, SUPPORTED BY RISING DISPOSAL
INCOME AND CHANGING LIFESTYLES
A growing consumer economy with highest forecast growth in personal disposal Vietnam stood out as having the highest disposal
income through 2018e and the largest % of population in the workforce income per capita CAGR through 2018e and the largest
percentage of the population in the workforce,
allowing for Vietnamese people to increase frequency
and spending on tourism.
Domestic low-cost carrier (LLC) Vietjet Air effectively

only started from 2012, while regional LLCs also just
recently entered Vietnam when Vietnam opened the
sky (under ASEAN Open Skies initiative). LLC
seats/1,000 people in Vietnam therefore are
substantially lower than in Thailand, Myanmar or
Singapore. We expect more routes provided by LCCs to
further boost inbound tourists who come to Vietnam
for the experience at affordable costs.
Both # of LLC seats/’000 people and # of aircrafts/mln people are still low
TAKEAWAY
As affordability is one of the key selling
points for Vietnam, we expect more low-
cost carriers and strong disposal income
growth to further boost both inbound and
domestic travel.
Source for both charts: EIU, CAPA, Euromonitor, Vietnam Tourism Board
VIETNAM

DESPITE STEADY GROWTH, VIETNAM TOURISM RANKS LOW
Vietnam had already met most of its 2020 targets in 2018 By end-2018, most of the objectives set out in the
2020-2030 Master Plan had already been achieved.
Exceeded/ Both foreign and domestic travelers, and revenue
2018A 2020P
(Not yet) exceeded their targets by a wide margin.
Total international tourist arrivals (m) 18 10.5 71%
Despite all these positive achievements, Vietnam’s
Total domestic tourists (m) 80 48 67%
potential has yet to be fully tapped. It is ranked only
Revenues from tourism (USDb) 26.8 18.5 45% higher than Cambodia, Myanmar, Laos and Brunei by
the World Travel and Tourism Council.
as % of GDP 10.80% 6.75% 4.00%
Total accommodation suites ('000) 550 580 -5% There’s no effective national programme to promote
Vietnam. Many Vietnamese cannot even remember the
national tourism slogan, which is Timeless Charm!!!
Vietnam ranks relatively low on the world travel map Also, inaccurate perceptions of Vietnam continue, eg,
Vietnam is a backwards, poor and dirty country or
Absolute Relative everyone eats dogs and cats or it is unsafe etc.
World World
(USDb) % of GDP
Ranking Ranking
Thailand 15 95.0 34 21.2
Philippines 18 66.3 35 21.1
Indonesia 23 58.9 152 5.8
Malaysia 28 41.9 63 13.4
Singapore 33 31.5 88 10.2 TAKEAWAY
Vietnam 47 20.6 100 9.4
Cambodia 72 7.2 20 32.4 A cohesive campaign is needed to promote
Myanmar 87 4.9 140 6.6 Vietnam and its unique offerings.
Laos 118 2.0 61 13.7
Meanwhile, some cities/provinces will
Brunei 134 1.2 105 9.0
South East Asia Avg. 33.0 12.0 stand out as the next champions.
World Avg. 62.9
Source: Vietnam Tourism Board, GSO, World Travel and Tourism Council
VIETNAM

MOST POPULAR PLACES SPREAD NATIONWIDE
2018 passenger growth in most-visited places in Vietnam Until a more effective national campaign is launched,
high growth is likely to be more province- specific,
supported by completion of new or expanded airports.
(3) Quang Ninh: 5.2m, +22% Quang Ninh has emerged strongly, threatening the No.
2 position of Hanoi, the capital, as it’s close to the
border with China. We expect more arrivals after the
new airport started operations in late December 2018.
Khanh Hoa (Cam Ranh airport) benefits from direct

(2) Hanoi: 5.7m, +16% international flights from Thailand, Taiwan and South
Korea.
Phu Quoc enjoyed the highest growth in 2018 of 70%

YoY, thanks to more direct flights from Thailand,
South Korea, China, Finland and Sweden via London
(4) Da Nang: 2.8m, +23% and Hong Kong (from April 2019)
(5) Nha Trang: 2.8m, +36%
(1) HCMC: 7.5m, +17%
(7) Can Tho: 0.4m, +4% TAKEAWAY

Quang Ninh may see faster growth after its
(6) Phu Quoc: 0.5m, +70% new airport started commercial operations
in late December 2018.
Source: Vietnam Tourism Board, 2018 data
VIETNAM

UP-AND-COMING TOURIST HOTSPOT – QUANG NINH
Strong double-digit growth of key measures observed in 2017-18 Quang Ninh posted strong double-digit growth in 2017 vs.
unimpressive single-digit numbers prior to 2016, claiming
50% the 3rd most popular tourism spot in Vietnam by 2018-
end.
40%
Strong international arrivals largely contributed by
Chinese tourists thanks to proximity and accessibility.
30%
New Van Don Airport, which is able to receive
20% international flights, just commercially started from
December 2018.
10%
USD1b investment made in three infrastructure projects:
(1) Van Don Airport; (2) Ha Long International Cruise
0% Port; and (3) Ha Long – Van Don highway. All
2013 2014 2015 2016 2017 2018 commercially started from December 2018 only.
-10%
USD480m Van Don – Mong Cai highway commenced
Receipt from tourism growth Total passenger growth construction in April 2019, completing the connection
from the border with China’s Yunnan, Lao Cai, with
Int'l passenger growth Domestic passenger growth
Hanoi, the capital, and Haiphong, the city port and
another border with China’s Guangxi, Mong Cai. Van Don
Having Halong Bay, one of the 7 New World Wonders, Quang Ninh’s potential has – Mong Cai highway, once completed, will reduce travel
only been recently unlocked with billions of USD being poured into infrastructure. time from the China border (via Mong Cai) to Ha Long
Bay, one of the 7 New World Wonders, to only 1.5hrs.
Despite receiving 12.2m tourists compared with 7.6m by Da Nang, total receipts
from tourism in Quang Ninh were the same, approximately VND24t (USD1b) in TAKEAWAY
2018.
1st ever airport in Quang Ninh, coupled with
Source: Vietnam Tourism Board, local newspapers new inland connections from China and new
international cruise port are expected to
make the Province the new tourism hub in
the north of Vietnam.
VIETNAM

UP-AND-COMING TOURIST HOTSPOT – DA NANG
Da Nang’s total receipts from tourism increased faster than the number of arrivals By 2018-end, Da Nang had 23 international and regional
direct flights, of which 15 were scheduled and 8 were
40% charter flights, increasing the number of flights to the
city to 328/week. The Doha – Da Nang route, 4
flights/week, was added by Qatar Airways from 19 Dec
30% 2018.
International tourists to Da Nang increased at an avg. of

28.4% p.a in the past 5 years.
20%
New Terminal 2 of Da Nang Airport (from May 2017),

APEC 2017, Da Nang International Fireworks Festival and
10% Golden Bridge (from June 2018) etc. helped to attract
more tourists to the city.
0% In 2018, passengers arriving by airplanes rose 48.7% YoY,

2013 2014 2015 2016 2017 2018 while the number of cruises arriving at Tien Sa port
jumped 66% YoY. Da Nang ranked 15th in the New York
Receipt from tourism growth Total passenger growth
Times’ 2019 Places to Go.
Int'l passenger growth Domestic passenger growth
Tourism receipts increased faster than the number of
passengers, suggesting each tourist spent more (e.g.
The Golden Bridge was a big hit with 2013-18 revenues from tourism increased 26.1% p.a. on
Time Magazine, CNN, Reuters, avg., vs. 19.3% growth in number of passengers).
Huffington Post, The Independent
etc., which dubbed it as the ”coolest
bridge ever”, “top 10 most
incredible bridges”, “2018 best TAKEAWAY
photos”.
New infrastructure has made Da Nang more
accessible, while new products and services
provide more reasons for tourists to visit Da
Nang in the future.
Source: Vietnam Tourism Board, local newspapers and international media
VIETNAM

UP-AND-COMING TOURIST HOTSPOT – CAN THO
Can Tho’s total receipts from tourism posted 27.5% CAGR during 2013-18, higher than Largest city in the Mekong Delta (4th largest in
Quang Ninh (23.1%) and Da Nang (26.1%), albeit they are of a smaller total size Vietnam), known for rice fields, floating markets, rice-
paper-making village and picturesque rural canals.
Receipt from tourism growth Total passenger growth
65% Int'l passenger growth Domestic passenger growth 2019 game changer: various plans to make Can Tho
airport a substitute for Tan Son Nhat Airport, which
ran at 150% capacity last year. Can Tho airport,
50% started from 2011 ran at less than 30% of its capacity
in 2018, with 3m passengers and can be upgraded to
35% 5m passengers p.a.
Eight new routes (7 domestic and 1 international) were

20%
added in 4M19 (1 by Vietnam Airlines, 6 by Vietjet Air
and 1 by Air Asia) vs. only a total 4 domestic routes in
5% 2018 (3 by Vietnam Airlines and 1 by Vietjet). Air Asia
announced to start Bangkok – Can Tho flight from May
2013 2014 2015 2016 2017 2018 2019, and would add Kuala Lumpur – Can Tho later.
-10%
Most tourists arrivals to Can Tho are domestic passengers
Domestic passengers/total arrivals

100%
Da nang Quang Ninh Can Tho
80%
TAKEAWAY
60%
40%
2019 game changer: 8 new routes/flights
to Can Tho airport in just 4M19 (vs. only 4
20% routes/flights by end-2018); more to come
0% due to re-routing passengers from Tan Son
2012 2013 2014 2015 2016 2017 2018 Nhat Airport, which is operating at 150%
Source: Vietnam Tourism Board, local newspapers and international media
capacity.
VIETNAM

VIETJET (VJC VN): A DRIVER, ALSO BENEFICIARY OF RAPID
TOURISM DEVELOPMENT
VJC’s number of passengers and operating routes since establishment (2012-18) Listed on the Hochiminh Stock Exchange
120
Pax carried (Mln) No. of Operating Routes 105 Market Cap: USD2.7b, ADTV: USD3.9m, 12x PER, 4.4x P/B,
100 43.3% ROE, 15.1% ROA (TTM)
82
80 Established in Nov 2011, quickly gained market share
60 from Vietnam Airlines and Jetstar (70% owned by Vietnam
60 Airlines) to reach 48% in 2018.
40
40 Carried 23.1m passengers in 2018, +34.8% YoY on 118,923
24 23.1
16 14.1 17.1 flights, +20.3% YoY.
20 10 9.3
3.2 5.6
1.0
Highly efficiently managed airline (e.g. 88.06% load
0
factor, 99.64% technical reliability).
2012 2013 2014 2015 2016 2017 2018
Source: Company 64 aircrafts at the end of 2018. 316 in the order book to
be delivered over 2019-23.
VJC’s domestic market share rose to 48% by end-2018 in just seven years
2019 moderate growth guidance of 9% revenue and 7%
60
PBT. But management guided for compellingly high
48.0 growth of 53% top line and 44% bottom line YoY in 2020,
50 43.0
40.1 and about ½ of this growth in 2021 YoY.
40 37.1
29.6
30
20.2 TAKEAWAY
20
10
8.0 Dynamic, quick to adapt, fast-growing
airline that looks to return to strong
0 double-digit growth in 2020-21, according
2012 2013 2014 2015 2016 2017 2018
to the 2019 AGM guidance.
Source: Company
VIETNAM

VINPEARL, 1/3 SHARE OF 5-STAR HOTELS & RESORTS
MARKET IN VIETNAM
Vinpearl’s number of hotel rooms and accommodation (number of nights) grew Established in 2003, acquired by Vingroup (VIC VN) in
at 48% CAGR during 2013-18 2012, not listed.
No of room keys - L No of nights provided ('000) - R
Owns, developed and operates 43 5-star hotels and
18,000 4,000 resorts in 17 of Vietnam’s most popular tourist spots.
16,000 3,500
14,000 >16,000 hotel room keys, accounting for around one-
3,000 third of Vietnam’s 5-star hotels and resorts.
12,000
2,500
10,000
2,000 In 2018, Vinpearl received 8.4m guests, using its
8,000 products and services under the six brands of
1,500
6,000 hospitality (Vinpearl Resort, Vinpearl Discovery,
4,000 1,000 Vinpearl Condotel, Vinpearl City Hotel, VinOasis và and
2,000 500 Vinpearl Luxury), and three brands of recreation
- - (Vinpearl Land, Vinpearl Safari and Vinpearl Golf) and
2013 2014 2015 2016 2017 2018 others.
Source: Company
Vinpearl is the largest 5-star hotel, resorts and recreation operator in

Vietnam (amusement parks, golf courses)
TAKEAWAY
Vinpearl, once listed provides exposure to
an attractive 35% share of the market for
Vietnam’s rapidly growing 5-star
hospitality facilities.
Source: company
VIETNAM

SAIGON TOURIST’S UPCOMING IPO,
LARGEST OF ITS KIND
Saigon tourist’s operating results since 2013 Providing exposure to tourism via hotels and restaurants:
54 hotels with 8,000 rooms, 13 recreation and
7,000 entertainment assets and 28 restaurants nationwide in
Revenues EBIT PBT NPATMI
6,000 the most premium locations of Vietnam’s major cities.
5,000
100%-owned by the State. Saigon Tourist plans to list in
4,000 2H19 or latest by 2020, according to IPO master plan of
the government. Market cap is estimated to be USD1.5-
3,000
2b based on an estimate of 23-30x PER. The valuation
2,000 for Saigon Tourist’s properties in premium locations and
its brand value is being made as part of IPO preparation
1,000
in order to meet the deadline set above.
-
2013 2014 2015 2016 2017 6M17 6M18 Latest data shows VND20.3t or USD900m in sales in 2017,
Source: Company, latest FS available 1H18 interim results doubling revenues between 2013 and 2017.
Number of customers using tourist services grew at 15.2% CAGR during 2014-17 In 2017, Saigon Tourist reported VND6.2t in revenues,
+6.6% YoY, and 34% increase in EBIT as EBIT margin
2,500 improved to 8.2%.
No. of passengers using accomodation ('000)
No. of customers using tourist services ('000)
2,000
1,500
1,000 861 930 TAKEAWAY

797
529 538 Investors may wait to participate in Saigon
500
Tourist’s IPO, a leading company in the
tourism sector.
-
2013 2014 2015 2016 2017
Source: Company
Source: Company website
INDONESIA
INDONESIA
Isnaputra Iskandar (62) 21 8066 8680 isnaputra.iskandar@maybank-ke.co.id

Luthfi Ridho (62) 21 8066 8690 luthfi.ridho@Maybank-ke.co.id
GROWING IMPORTANCE & GROWTH POTENTIAL

A key priority of President Jokowi, tourism is expected to be a fast-
growing sector. Indonesia’s travel account surplus of USD5.3b contrasted
starkly with its USD31.1b current-account deficit in 2018.
Foreign arrivals reached 15.8m in 2018. Growth has accelerated to 15.6%

pa since 2015, from a 7.3% CAGR in 2008-2015. Income from inbound
tourists was USD14.1b in 2018. This is expected to reach USD25b in 2024.
Inbound tourism only accounted for 1.4% of GDP in 2017, the lowest in
ASEAN, even though Indonesia has eight UNESCO world heritage sites.
Another 20 are on UNESCO’s tentative list.
CREATING 10 NEW BALIS

To give tourism a big jolt, President Jokowi wants to create 10 new top
tourist destinations in Indonesia, dubbed The 10 New Balis. These will
expand destinations for tourists and reduce the country’s dependence on
Bali as its main tourist attraction. Total investments are estimated at
USD20b to improve connectivity and facilities.
In addition, the government launched programmes such as visa exemption

for 169 countries in 2016. It has also introduced sports and conference &
exhibition (MICE) tourism. It has applied to UNESCO for one more world
heritage site.
INVESTMENT OPPORTUNITIES
Coming from a low base, Indonesian tourism offers significant investment
opportunities. Direct investment opportunities exist in connectivity and
accommodation. Listed companies that provide good exposure to the
growing industry include Jababeka (KIJA). It owns large property UNESCO WORLD HERITAGE SITE IN INDONESIA
Borobudur Temple
developments in two of the 10 New Balis. Beneficiaries should also
include state-owned contractors such as PTPP, WIKA, ADHI and WSKT; and
airline-related stocks such as GIAA and GMFI.
INDONESIA

INBOUND TOURISM HELPS CURRENT ACCOUNT
Travel services account also up Tourism is a bright spot amid Indonesia’s current-
account deficit. It generated a USD5.3b surplus in 2018
(USD m)
Export Import Surplus compared to Indonesia’s USD31.1b current-account
15,000 6,000 deficit. Its inbound revenue of USD14.1b was the
12,500 5,000 fourth-largest contributor to export revenue in the
current account, behind coal, palm oil and metals.
10,000 4,000
7,500 3,000 Indonesia’s travel services account (exports) grew at a
5,000 2,000 12.1% CAGR (2016-18) to USD14.1b on the back of
rising arrivals. This more than offset USD8.7b
2,500 1,000 outbound spending (7.7% CAGR) by around 10m
0 0 Indonesians travelling abroad, including 221,000 Hajj
2010 2011 2012 2013 2014 2015 2016 2017 2018 pilgrims and another 362,038 Umrah travellers.
Source: BI, CEIC It is imperative for the government to prioritise

tourism as the surplus in the travel account could
Can tourism save Indonesia’s current account? quickly dissipate if Indonesians travel abroad more as
In USD m 2010 2011 2012 2013 2014 2015 2016 2017 2018
their income rises.
Trade balance 31,003 33,825 8,680 5,833 6,983 14,049 15,318 18,814 -431
Service balance Indonesia’s current-account deficit hit a high of 3.6%
Travel 563 1,741 1,553 1,444 2,579 3,469 3,639 4,850 5,338 in 4Q18. Its service and income balances have always
Personal, Cultural & Recreational Services -29 -54 -71 -80 -94 45 36 74 278
been in deficits. Therefore, when its trade balance
Manufacturing -216 1,081 397 430 425 356 351 354 382
Financial services -209 -303 -469 -453 -398 -497 -577 -442 -439 turned from surplus to deficit in 2018, investors were
Insurance & pension services -1,131 -1,267 -1,072 -1,029 -938 -888 -661 -570 -643 concerned about the sustainability of its current
Intellectual property -1,557 -1,709 -1,742 -1,684 -1,802 -1,601 -1,686 -1,851 -1,401 account that is highly dependent on commodity
Transportation -6,007 -8,693 -8,679 -8,928 -8,184 -6,146 -5,544 -6,864 -8,837
exports (57% of total goods exports).
Others -1,205 -600 -481 -1,770 -1,597 -3,435 -2,641 -2,931 -1,779
Total -9,791 -9,803 -10,564 -12,070 -10,010 -8,697 -7,084 -7,379 -7,101
Others
Primary income -20,698 -26,547 -26,628 -27,050 -29,703 -28,379 -29,647 -32,131 -30,420
TAKEAWAY
Secondary income 4,630 4,211 4,094 4,178 5,220 5,508 4,460 4,500 6,892
Total -16,068 -22,337 -22,533 -22,872 -24,483 -22,871 -25,187 -27,630 -23,528 Inbound tourism is crucial to help reduce
Surplus / (deficit) 5,144 1,685 -24,418 -29,109 -27,510 -17,519 -16,952 -16,196 -31,060 future current-account deficits, given its
Source: BPS, CEIC strong upside potential.
INDONESIA

POTENTIAL FOR GDP
Tourism Investment Realisation While tourism contributions to the current account are
(USD m) high, their contributions to GDP are still small and well
1,500
below potential, at 1.4% from inbound tourists. There
is no official data on domestic tourism but estimates
1,200
160 359 put it at 2-3% of GDP.
639
Statistics Indonesia will be introducing a Tourism
900 317
Satellite Accounts to separate tourism in its GDP
breakdown in 2019, in an acknowledgement of the
600 173 1,193
140 1,090 sector’s rising importance.
869
732
300 512 Tourism’s upside potential is substantial given that the
463
average spending of inbound tourists is still less than
0 USD900 per pax vs USD1,500 in Thailand. Their average
2013 2014 2015 2016 2017 2018
stay is only two days. Meanwhile, most of the 250m
domestic travellers still travel on low budgets.
Source: BKPM (Investment Board)
10 New Balis aims to improve the duration of stay,

GDP breakdown, 2018 Agriculture, tourist spending per pax and the capacity of tourism in
Forestry & Indonesia. Tourist arrivals in Bali reached 15.8m in
Fisheries, 13%
2018, both inbound and domestic. This is fast
approaching Bali’s optimum capacity of 20m (source:
Others, 36%
Mining & BPS). About 40% of its inbound tourists or 6.1m
Quarrying, 8% (+10.6% YoY) arrived via the Bali Nugrah Rai airport in
2018.
Manufacturing,
20%
Wholesales TAKEAWAY
Construction, & Retail Trade, Tourism is destined to become a new source
11% 13%
Source: BI, CEIC of growth in the next decade.
INDONESIA

ACCELERATING GROWTH OF INBOUND TOURISTS
Indonesia’s tourism - a growing sector Growth of inbound tourists to Indonesia accelerated to a

15.6% CAGR in 2015-18, more than double the 7.3% in
Foreign tourists 2008-15.
(M people)
18
16 This was fuelled by active government programmes,
including visa exemption for 169 countries, the
14
promotion of border tourism and intensive promotion of
12
Indonesia as a MICE and sports-tourism destination.
10
8 Travel services account (exports) grew at 12.2% pa to
6 USD14b in the past two years on the back of rising
4 tourist arrivals. Yet, revenue per tourist declined 2.9%
2 pa to USD893 in 2018 because of stronger growth in
border tourism that generates less revenue per pax and
0
involves shorter stays.
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Source: BPS, CEIC Over 70% of the foreign tourists were from Asia: ASEAN
35%, non-ASEAN 37%. Tourists from Timor Leste grew
from 1% of the total in 2013 to 10.8% or 1.76m pax by
Indonesia's tourism is dominated by Asian visitors 2018, due to border tourism.
2008 2013 2018
ASEAN 2.8 3.6 5.5 Indonesia needs to capture Chinese outbound travellers
North Asia 1.5 2.0 3.3 who spent a total of USD261b in their worldwide travel
South Asia 0.1 0.2 0.6 in 2016, ranked No. 1. Of the 150m Chinese outbound
Asia – others* 0.1 0.1 1.9 tourists, only 2.1m or 1.4% visited Indonesia in 2018.
Oceania 0.5 1.1 1.6
Europe 0.9 1.2 2.0
America 0.2 0.3 0.6
Africa 0.0 0.1 0.1 TAKEAWAY
Middle East 0.1 0.2 0.3
Total (m) 6.2 8.8 15.8 Inbound tourism is picking up and should
* Mostly Timor Leste accelerate if Indonesia manages to capture
Source: BPS, CEIC more Chinese travellers.
INDONESIA

DOMESTIC TOURISM ON THE RISE
Indonesia tourism - a growing sector Domestic tourism grew at a slower 2.0% pa in the past
decade from a high base. Despite its slower growth,
(M people) Domestic tourists absolute numbers were large at 250-260m, providing
300 downside protection to the sector. About 25m were
new travellers added in the past five years.
250
The popularity of social media in Indonesia - 61m
Instagram users, the fourth-largest in the world, and
200
120m Facebook users, third in a tie with Brazil - and
changing lifestyles mean that domestic travellers will
150 continue to grow.
100 Despite their large numbers, their average spending

power is still lower than that of inbound travellers.
50 Many are short-term travellers, including day-trippers.
Even in Bali, which is the choice destination of middle-

0
and higher-income domestic travellers, the average
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
stay is lower at 1.8 days in non-starred hotels and 2.7
days in starred hotels vs three days for foreign tourists
Source: BPS, CEIC in both starred and non-starred hotels. Bali received
9.8m domestic tourists vs 6.1m foreigners in 2018.
TAKEAWAY
Revenue per person from domestic
travellers should continue to grow as
income rises.
INDONESIA

FULL SUPPORT FROM GOVERNMENT
Short-term targets Unlike his first term when President Jokowi focused on
infrastructure, we expect him to launch “more
20
18 balanced” policies during his second. Infrastructure
16 should remain key, but other sectors will be developed
14
as well. The latter would include tourism, human
resource development and the digital economy.
10 New Balis is a clear sign of government support for

the sector. Implementation and investments have
started. Private-sector companies such as Jababeka
2018 2020F (KIJA) have been licensed to develop two of the 10-
# of foreign tourists (m people) Travel services account - export (USD b)
New Bali, in Tanjung Lesung and Morotai.
The government’s 2020 targets of 20m visitors and

Source: Ministry of Tourism, BPS, CEIC
USD18b revenue look achievable, as: 1) its 20m target
is in line with a foreign-tourist CAGR of 12.5% in the
One of the main priorities in 2019-24 past five years; and 2) its revenue target suggests flat
revenue of USD900 per tourist.
Social
Infrastructure
Services
Digital 2019-24 Human

Economy priorities Capital
TAKEAWAY
Tourism Fiscal Tourism is an important priority for the
second Jokowi government.
Source: TKN
INDONESIA

BUILDING WORLD-CLASS DESTINATIONS
Tourism programmes Developing the sector will require more than

improving connectivity. A comprehensive approach is
needed.
Connectivity • Initiatives could include free-visa programmes,

more domestic and international marketing and the
launch of more MICE and sports-tourism
Free Visa Foreign programmes.
(169 countries) Investments
• Halal tourism will also be developed. This year’s
target is 25% of total foreign tourists, up from 22%
Tourism in 2018.
Intensive
Marketing Sports Tourism
M.I.C.E
Source: Ministry of Tourism
TAKEAWAY
Developing tourism will require a
comprehensive, holistic approach.
INDONESIA

MONETISING POTENTIAL
Indonesia’s TTCI performance Indonesia is working to monetise its full potential as a

(Travel and Tourism Competitiveness Index) tourist destination. For many years, it has relied on
2008 2009 2011 2013 2015 2017 Bali as its main tourist draw.
0 4.2 • Foreign tourists are concentrated in Bali (38%),
4.2
10 4.1 Jakarta (18%) and Batam (12%).
20 4.0 4.0 • The figure for Bali is likely to be higher if we
4.0 4.0
30 include foreign tourists going to Bali from other
3.9
RANK
domestic cities.
SCORE
40 42
3.8 3.8
50 50
60
3.7 3.7 Where are the 10 new destinations?
70 3.6 • Nine are natural scenic attractions and national
70
74
3.5 parks, with Borobudur as their core cultural centre.
80 80 81
• 70% will offer water-based tourism.
90 3.4
• Three immediate priorities are Mandalika, Lake
Toba and the Borobudur Temple.
• Bali will serve as a connectivity hub through more
Locations of 10 New Balis scheduled flights and infrastructure/airport
expansion.
Total investments of USD20b, from both domestic and

foreign investors, will be required. The long-term
target is to attract 9.5m foreign tourists to these new
destinations.
TAKEAWAY
10 New Balis is a new initiative to diversify
and monetise Indonesia’s substantial
tourism potential.
Source: BPS, CEIC
INDONESIA

LAKE TOBA – AN EXAMPLE
Lake Toba – one of the 10 New Balis Certain locations such as Lake Toba, dubbed the Monaco
of Asia by President Jokowi, will require a total revamp,
including of infrastructure.
Lake Toba is well-known as the largest volcanic lake in

the world with beautiful scenery. It was a popular
foreign-tourist destination until the 1990s, when a lack of
infrastructure started to deter tourism.
To revive the place, President Jokowi formed a Lake

Toba Authority Board to oversee its development in 2016.
Some progress has been made:
- A toll road from Medan to Tebing Tinggi, built by Jasa

Marga (JSMR IJ), has been completed. The second part
to Lake Toba, done by Hutama Karya (not listed) is in
progress, and is expected to be completed by 2020.
- Renovation of Silangit Airport (IATA: DTB) to turn it

into an international airport was completed by
Angkasa Pura II (not listed) in 2017. It can now
Source: Family Travel accommodate wide-bodied airplanes and has
increased its handling capacity from 36.5k to 500k
passengers pa. (to be raised further to 1m this year).
In 2018, the airport handled 425k passengers (85%
utilisation rate).
- A second airport, Sibisa (IATA: SIW) in Lake Toba, was

TAKEAWAY upgraded into an international airport by the Ministry
of Transportation in 2017. The airport has been
Lake Toba is an example of President operating since April 2019.
Jokowi’s commitment to his 10 New Balis
development. - In order to turn Indonesia into a service-oriented
society, the government has provided continuous
programmes in travel services, foreign languages etc.
INDONESIA

CONNECTIVITY IS CORE TO SUCCESS
Mode of foreign tourist arrivals Around 64% of the foreign tourists in 2018 came to
Indonesia by air.
(M people)
To meet growing passenger demand, capacity at its
Airports 10.1 nine biggest airports will be increased by a 14.5%
CAGR in 2015-19 to 18.5m pa.
Sea ports 3.2 Despite the capacity increase, total current capacity is
still below the 152.3m arrivals. Of the nine airports,
only two - Sepinggang in Balikpapan and Kertajati in
Bandung - have higher capacity than their passenger
By land 2.5
numbers. The other seven are operating close to or
above capacity.
0.0 2.0 4.0 6.0 8.0 10.0 12.0
Source: BPS Some airports have plans to increase their capacity.
We estimate that total capacity of the nine largest
airports will increase by more than 50% in around four
Number of airports
years. Despite the government’s plan to move the
Capacity, m Current capital somewhere else, we think expansion plans for
No Airport Location passenger p.a. passengers Remark Soekarno-Hatta will be in tact as Jakarta will remain
2015 Now CAGR p.a., m
the main business centre even after the relocation.
Capacity will be increased to 100m
1 Soekarno-Hatta Jakarta 22.0 62.0 29.6% 67.0
by 2025
Capacity will be increased to 37m Angkasa Pura I and II (not listed) are working on
2 I Gusti Ngurah Rai Denpasar 17.0 24.0 9.0% 23.7
by 2023 funding for the expansion, which could include
3 Juanda Surabaya 12.5 22.0 15.2% 21.0
Capacity will be upgraded at least internal funding, bank loans, bond issuance and public
to 31m in 3-4 years
private partnership (PPP).
4 Sepinggan Balikpapan 10.0 10.0 0.0% 7.5
5 Kualanamu Medan 8.0 8.0 0.0% 10.5
Capacity will increase to 15.5m by
6 Sultan Hasanudin Makassar 7.5 7.5 0.0% 10.0
7 Kertajati Bandung 0.0 5.6 N/A 1.0
2021 TAKEAWAY
Capacity will increase to 10m in 3
8 Hang Nadim Batam 5.0 5.0 0.0% 6.5
years Connectivity has been improving over the
9 Ahmad Yani Semarang 4.4 4.4 0.0% 5.1
Capacity will increase to 7m in past four years. Plans are afoot to develop
2020
Total 86.4 148.5 14.5% 152.3 it further.
Source: Angkasa Pura
INDONESIA
DIRECT INVESTMENT OPPORTUNITIES
Total investments for 10 New Balis As per the Ministry of Tourism, total investments for
the 10-New Bali projects are USD20b. There are
several investments that domestic/foreign can
participate in, such as infrastructure (toll roads) and
hotels.
Incentives from the government include:

1. For toll roads, guaranteed price increases every
two years based on a 2-year inflation rate
2. Foreigners/foreign entities may have properties

built on land plots by virtue of agreements with
holders of the land rights.
We estimate that toll-road IRRs are 9-10% with

payback periods of 13-15 years. We assume a 70%
Source: Ministry of Tourism utilisation rate and 55% EBITDA margin.
For hotels, we estimate IRRs of 10-12% and payback

Estimated investment returns periods of 5-10 years. Our estimates assume: 1) room
and F&B businesses only; and 2) an EBITDA margin of
Payback period, Utilisation EBITDA 50%. Returns could be higher if we take into account
Investment IRR, % Investments
years rate margin other potential businesses such as events, meetings,
etc.
Hotel 10 - 12% 5 - 10 65% 50% IDR300-700b per hotel
Toll road 9 - 10 13 - 15 70% 55% IDR200b per km
TAKEAWAY
Source: MKE
Investing in hotels is easier than toll roads
and provides more rewarding returns to
investors.
INDONESIA
STOCKS WITH EXPOSURE TO TOURISM
Potential beneficiaries of tourism development
2019 2020
Share Market 3M 2019F 2019F EPS EPS 2019F 2019F
No Sector Company Ticker Description price* cap ADTV PER PBV growth growth ROE Yield
(IDR) (USD m) (USD m) (x) (x) (%) (%) (%)
GIAA is a dominant domestic carrier controlling 51% of domestic air travel. It recently acquired
1 Airlines Garuda Indonesia GIAA IJ Sriwijaya Air and operates 252 aircraft. Indonesia’s domestic and international air passengers 448 814 2.6 12.7 0.8 na 72.5 6.9 0.0
reached 142m in 2018 and are expected to double in 2034.
Garuda GMFI is the largest aircraft-maintenance company in Indonesia, providing total solutions to about
2 Airlines Maintenance GMFI IJ 191 customers. The Ministry of Industry expects the MRO industry to reach USD2.2b in 2025, more 222 444 0.5 na 1.6 24.7 13.5 11.4 0.0
Facility Aero Asia than double 2016 levels.
ADHI is the main contractor for Greater Jakarta LRT. It focuses on the development of mass
3 Construction Adhi Karya ADHI IJ 1,680 420 1.3 6.4 0.8 53.6 8.5 14.7 3.0
transportation.
Pembangunan PTPP is a leading contractor in port development. It also has a strong presence in property
4 Construction PTPP IJ 2,310 1,005 4.1 8.3 1.0 14.1 20.0 13.4 2.7
Perumahan investment and the development of high-rise buildings.
WIKA is one of the most diversified state-owned contractors with experience in developing
5 Construction Wijaya Karya WIKA IJ 2,370 1,492 4.4 10.7 1.2 10.8 18.8 13.0 2.1
airports, toll roads, rail-based mass transportation and others.
WSKT has the highest exposure to government-funded infrastructure projects. The largest SOE
6 Construction Waskita Karya WSKT IJ contractor by market cap, it focuses on investing in toll-road projects and is a pure construction 2,040 1,943 7.0 7.4 1.1 -3.0 -11.7 21.3 3.3
contractor.
KIJA’s interests span industrial real estate and complementary infrastructure and estate
Property &
Kawasan Industri management services. It also develops commercial and residential real estate as part of its
7 industrial KIJA IJ 248 362 0.2 na na na na na na
Jababeka integrated industry-based townships. It owns large property developments in two of the 10 New
estate
Balis.
* Closing prices as of 2 May, 2019

Source: Company, Bloomberg consensus
TAKEAWAY
Equity investments are a cheaper way to
invest in the tourism sector. Our
preferred sectors are construction and
property & industrial real estate. All
construction companies are experienced
in airport-building.
INDONESIA
RISKS & RESILIENCE
Number of foreign tourists has been resilient since 2006 Terrorism and natural disasters have been the biggest
(M people) Eruptions of threats to Indonesia’s tourism. Bomb blasts in Bali,
18 volcanic Jakarta and other cities in 2001-05 put off foreign
16
moutains tourists. They dropped from 5.2m in 2001 to 4.5m in
Shooting & terrorist 2003. They increased a bit to 4.9m in 2006.
14
attack in Jakarta
12 Foreign tourists started to look more resilient from
Aceh tsunami Major bombing 2006. Despite terrorism and natural disasters in 2006-
10 & second at Jakarta hotels
First Bali 18, they rose to 15.8m in 12 years.
bombing Bali bombing
8
Building a world-class tourism industry is a long-term
6
commitment, which takes strong and continuous
4 support from the government. We estimate that
2 foreign tourists would have to more than triple to turn
Indonesia’s current account positive.
0
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Source: BPS, CEIC
Not a short-term job

Amount
CURRENT FACTS
2018 CAD (USD b) 31.1
2018 travel services export (USD b) 14.1 TAKEAWAY
2018 foreign tourists (m people) 15.8
2018 tourism services/tourist (USD) 893 Inbound tourism started to defy terrorism
TO HELP CAD and natural disasters in 2006. This is a
Additional travel services export (USD b) 31.1 good indicator of growing sector resilience
Additional foreign tourists (m people) 34.8 to internal and external threats.
Tourism services/tourist (USD) 893
Source: BPS, CEIC, Maybank KE
PHILIPPINES
PHILIPPINES
Minda Olonan (63) 2 839 8840 minda.olonan@maybank-atrke.com
TOURISM, THE NEXT GROWTH DRIVER

International visitor growth has been robust at a 9% 5-year CAGR,
boosted by the recent surge of Chinese visitors. Visitor receipts
however, only account for 2.1% of GDP, the second lowest in ASEAN.
Meanwhile, domestic tourism is healthy, driven by strong
discretionary spending.
A ramp-up of government and private-sector investments in airports,

roads and ports is the key catalyst that could open the gates to
rising tourist attractions to reach the goal of 12m tourists by 2022.
“IT’S MORE FUN IN THE PHILIPPINES”

Integrated beach resorts and eco-tourism are on top of the
government’s sustainable tourism agenda, given the abundance of
natural tourist sites. The private sector has invested in casinos, MICE
and retail. The Philippine archipelago favours the cruise industry but
this is contingent on port expansion. Medical tourism and retirement
facilities have long-term potential.
MONETISING TOURISM POTENTIAL

Prospects of better infrastructure and a robust domestic tourism
sector offer opportunities for private sector investments. Hotel
services could offer decent returns, although land ownership is
restricted to foreign investors. Listed pure tourism plays outside of
casinos and airlines are unfortunately limited, although property
UNESCO WORLD HERITAGE SITE IN THE PHILIPPINES
companies are expanding their hotel/resorts/MICE exposure. Historical Town of Vigan
2019 ASEAN TOURISM OUTLOOK 95

PHILIPPINES

ADDRESSING BOTTLENECKS TO UNLOCK
TOURISM POTENTIAL
STRENGTHS WEAKNESSES
Rich in natural resources with over Underdeveloped transport

7,100 islands with abundant beaches, infrastructure and tourist facilities.
diving sites and mountains as popular Airports are congested and traffic
tourist destinations. conditions in the cities are bad.
Mostly English-speaking population. Underdeveloped system for
Large pool of overseas Filipino integrating tourist services.
workers employed in tourism could Source: Inquirer
be tapped. Unpredictable weather and higher
Casino sector has reached incidence of natural disasters.
Source: Rappler, critical mass.
www.whatsnew.ph
OPPORTUNITIES THREATS
Massive infrastructure programme Perceived concerns of personal safety for

to improve access to tourist spots. travellers (eg; martial law in Mindanao,
terrorist threats).
Promotion of sustainable tourism
(eco/cultural). Aggressive competition from ASEAN
neighbours.
Archipelagic geography is suitable
for cruises. Stricter enforcement of environmental
regulations, although necessary, causing
Improved government short-term disruptions to tourist traffic Source: CNN,
Source: PhilStar,
relationships with China have (eg; Boracay closure). livinglifeph.com
Department of Tourism
prompted an influx of Chinese
tourists.
TAKEAWAY
National Tourism and
Development Plan’s 20 Tourism opportunities are largely
Tourism Clusters
untapped due to weak infrastructure.

PHILIPPINES

STEADY GROWTH IN VISITOR ARRIVALS BUT
GDP CONTRIBUTION STILL LOW
Inbound arrivals by country (in 000’s number of trips) International visitor arrivals have grown at a healthy
8.8% CAGR over the past five years, reaching 7.1m in
2018. China (+24% CAGR) has been the fastest growing
source of visitors and accounted for 17.6% of inbound
tourists, dislodging the US (+8.9% CAGR) from the
second spot in 2018. Korea remained in the top spot
with a 22% share, although growth plateaued in 2018.
In order to reach the government’s target of 12m

visitors by 2022, annual growth would need to step up
to 14%.
Visitor receipts rose by an 11.7% CAGR to USD6.6m

over 2012-2017, with average daily expenditure at
USD130/day. Average expenditure per tourist rose
Source: CEIC, Department of Tourism moderately at a 2.4% CAGR to USD1,005 (2012 – 2017).
Total flows, however, accounted for only 2.1% of GDP
Contribution of tourism receipts still low in 2017 vs 1.5% in 2012, the second lowest in ASEAN.
7,000 2.5
6,000 2.1 2.0
5,000
4,000 1.5
3,000 1.0
2,000
1,000
0.5 TAKEAWAY
- 0.0
Visitor arrival growth expected to
2012 2013 2014 2015 2016 2017
accelerate as contributions to GDP are
Visitor Receipts (in USD m) % of GDP currently below par.
Source: Department of Tourism

PHILIPPINES

CHINESE VISITORS HAVE OVERTAKEN US IN 2nd SPOT
Chinese visitors’ share doubled from 9% in 2013 to 18% in 2018 China (+24% CAGR in 2013-18) has been the fastest-
growing source of visitors and accounts for 17.6% of
Mar-17: inbound tourists, overtaking the US (+8.9% CAGR) in the
1,400,000 Philippines: Visitors from China Okada 20% second spot in 2018.
2016: President Manila
% of total visitors (RHS) Duterte assumes 18% Growing interest from Chinese gamblers in new casinos in
1,200,000 office. Start of Entertainment City, Metro Manila, triggered the surge in
issuance of POGO
16% 2013.
licenses.
1,000,000 Warmer relations with China when President Duterte
14% assumed office in 2016 triggered a second wave, followed
Feb-15:
Mar-13: City of by the issuance of licences to Philippine offshore gaming
12%
800,000 Solaire Dreams operators (POGOs) catering to mainland Chinese.
Resort &
Casino 10% Start of China ODA-assisted infrastructure projects and
project rollout of the third telco player, Mislatel (JV with
600,000 Chinatel) could continue to drive visitor growth over the
8%
Aug-18: next five years.
Resorts World Manila
400,000 6% Key risks: (1) local backlash to the alleged illegal entry of
Chinese workers could result in tighter enforcement of
4% immigration policies; (2) Chinese government plugging
200,000 POGO operations; and (3) escalation of tensions in the
2% South China Sea. .
- 0%
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
TAKEAWAY
Source: CEIC
Chinese tourism is booming but long-term
sustainability is still uncertain.

PHILIPPINES

MORE ROBUST EXPENDITURE BY
DOMESTIC TRAVELLERS
Number of domestic leisure trips has doubled over the past 5 years Euromonitor estimates domestic travellers totalled
23.6m in 2018, 23.4% of the population.
50,000 Outbound Leisure Domestic Leisure
PSA estimates tourism-related revenue from domestic
40,000
travellers rose by a 5-year CAGR of 21.5% to PHP 2.60t
30,000
(USD52.4b) in 2017, ahead of the government target of
PHP1.95t. The personal income tax cuts under Package
20,000 1 of the tax reform programme and steady overseas
remittances would likely have sustained growth in
10,000 domestic tourism in 2018.
No of trips
-
(in 000s) Euromonitor notes that the number of domestic leisure
2013 2014 2015 2016 2017 2018 trips doubled for the period 2014-2018. At the same
Source: Euromonitor time, the number of outbound leisure trips has jumped
sharply, also driven by lower airfares.
Domestic tourism expenditures exceeding government target
(PHPb)
Target Domestic Actual Domestic Target Domestic Revenue
3,500
3,000
2,500
2,000
1,500
1,000 TAKEAWAY
500 Strong discretionary spending favours
- domestic tourism.
2015 2016 2017 2018F 2019F 2020F 2021F 2022F
Source: CEIC, Philippine Statistics Authority

PHILIPPINES

BRIDGING THE TOURISM INFRASTRUCTURE GAP
Medium-term tourism infrastructure program The government aims to spend PHP677b on tourism
infrastructure until the end of President Duterte’s
(PHPm) 2017 2018 2019 2020 2021 2022 Total administration in 2022. This excludes projects funded
by Official Development Assistance (ODA) and Public
Airports(1) 7,788 18,027 12,338 7,659 9,484 7,472 62,768 Private Participation (PPP).
Cruise Ports(2) 1,858 1,100 600 950 900 700 6,108 The programme includes the construction of a road
network covering 7,380 kms, and a number of airport
and port expansion projects.
Roads(3) 22,500 35,000 38,400 42,000 26,500 20,100 184,500
Railway(4) 150 300 150 300 47,500 207,500 255,900
Site Infrastructure(5) 23,066 23,631 24,416 25,442 26,731 28,343 151,629
TEZs(6) 792 2,282 2,316 2,817 3,522 4,402 16,131
Total Public 56,154 80,340 78,220 79,168 114,637 268,517 677,036
Source: Department of Tourism (DOT)

[1] Budget of DOT including estimates of improvement costs in NAIA; Excludes estimated value of the
privatisation of the regional airports (New Bohol, Davao, Iloilo, Bacolod and Laguindingan) equivalent to
PhP202 B and of NAIA for PhP72.5 B; CAAP Budget on annual improvements not yet included.
[2] National Cruise Tourism Strategy 2016-2022.
[3] Based on the estimated road network requirements of the clusters.
[4] Includes estimates for Manila-Clark, Clark-Cordillera, Cagayan de Oro-Davao railway program based on
design-build modality.
TAKEAWAY
[5] Includes power, streetscapes, water, signages in the tourism development areas.
[6] Based on the budget of TIEZA for 2017-2022 and estimated requirements for 2021 and 2022. Tourism sector to benefit from ramp-up in
infrastructure spending.

PHILIPPINES

BRIDGING THE TOURISM INFRASTRUCTURE GAP
Tourism clusters and destination areas Key airport terminals are congested, with Manila’s main hub (NAIA) operating
at 50% above capacity. The government aims to double terminal capacity to
89.5m passengers by 2022 (139.5m including private proposals).
Priority Gateways
Laoag Conglomerates have submitted unsolicited bids, such as for the PHP350b
NAIA rehabilitation (AEV/AC/AGI/FDC/JGS/MPI/Changi consortium) and
PHP735.6b Bulacan International Aeropolis (San Miguel Corp).
The government is undertaking other measures to boost visitor arrivals, such
as increasing aircraft seat entitlements between the Philippines and target
Clark growth country markets, and faster visa applications (eg; visa upon arrival).
NAIA Airport Terminal Capacity (m passengers)
Terminal Capacity Total Pax Traffic Projected Terminal
Gateway (2017/2018) (2017/2018) Capacity (2022)
Manila 30 45.1 47
Clark 4 2.7 7.5
Cebu 4.5 11.4 15
Mactan Davao 2 4.2 6.7
Iloilo Iloilo 1.2 2.0 4.5
Kalibo 0.7 2.5 2.4
Caticlan 3
Bacolod Palawan 0.4 2
Bohol 0.8 1.7
Bohol Laguindingan Panglao 3
Puerto Bicol 2.15 2.4
Laoag 2
Princesa Bacolod 3
Davao Laguindingan 4.3
Bulacan 35*
Total: 45.75 67.9 139.5
Source: Department of Tourism Source: Airport websites, company data, various news sources, CAPA
Unsolicited proposals:
Bulacan Aeropolis Airport – first phase has passenger capacity of 35m passengers. Phase two is another
40m passenger capacity but construction will depend on the growth of traffic and demand.
TAKEAWAY 2017 2018 2019 2020 2021 2022 Total

Aircraft Acquisition(1) 39,700 39,700 39,700 39,700 39,700 39,700 238,200
Public and private investments in airport (1) Based on refleeting program of Philippine carriers (5 A350s, 3 A320s, 30 A321 neos, and 16 ATR72600)
infrastructure are cranking up. Source: Department of Tourism

PHILIPPINES

PRIORITISING TOURISM SUBSECTORS
Measures of the 9 product portfolio The National Tourism and Development Plan (2016-
2022) has given top priority to the development of
integrated beach resorts, diving and marine sports,
national parks/eco-tourism and cultural tourism due
to their appeal to a wider range of markets.
Eco/farm tourism and cultural tourism are targeted to

maximise the potential for community participation.
MICE, shopping, leisure and entertainment (eg;
casinos) have been developed substantially, driven by
private investments, particularly in the urban centers.
They are, hence, classified as strategic products.
Cruise tourism could benefit from investment in

transit ports of call but potential is limited until a
dedicated cruise terminal in Manila is built.
Health and wellness, medical and retirement

tourism facilities are not ranked as key products due
to high investment requirements. Education tourism is
a niche product with appeal limited to 1-2 markets.
TAKEAWAY
Developing integrated beach resorts/eco-
tourism is at the top of the government’s
sustainable tourism development agenda.
Source: Department of Tourism

PHILIPPINES

LONG-TERM POTENTIAL FOR CRUISE TOURISM
Current and potential Batanes Cruise tourism has promising potential given the
Philippine cruise archipelagic nature of the Philippines. The
destinations government’s national cruise development strategy
Currimao Aparri aims to expand port calls from 56 in 2016 to 300 by
2022 with cruise passengers increasing to 656,635
Salomague passengers from just 47,100 in 2016.
Construction of a dedicated cruise terminal in Manila

has been cited as a key project that could jumpstart
Subic the cruise industry. Bloomberry Resorts is taking the
lead with its plan to construct a USD 308m cruise port
Manila near its casino in Entertainment City with the 1st
Romblon phase targeted for completion by 2021.
Coron
Boracay
El Nido Iloilo
Tagbilaran
Puerto
Princesa
Source: BPS, CEIC, Maybank KE, DOT Davao
Cagayan
de Oro
TAKEAWAY
Construction of Manila cruise port key
to developing cruise industry. Source: Solaire Cruise Centre Brochure

PHILIPPINES

CASINOS AND RETAIL DRIVING SPENDING
GROWTH IN ACTIVITIES
Breakdown of Total Tourism Expenditures (Inbound + Domestic) in PHPm Total tourism expenditures grew at a 14% CAGR in
2013-2017. The 18.5% CAGR in spending growth on
2013 tourist-related activities (30% of total) was largely
driven by casinos (+21% CAGR), and shopping ( +18%
CAGR).
2014
High-priority attractions (eg; culture, parks and

2015 others) only grew by 9.1%, and accounted for only less
than 1% of activities.
2016
Euromonitor conservatively forecasts activity spending
2017 to grow by just 3.4% annually until 2022.
- 500,000 1,000,000 1,500,000
Activities Travel in Destination Food Lodging Other

Source: Euromonitor Culture,
Heritage
and
2017 Breakdown of Museums,
Expenditure in Activities* 0%
Casinos, 32%
Shopping,
64% TAKEAWAY
Medical
Tourism, 2%
There is need to diversify tourist activities
Spas, 2% beyond casinos and shopping.
Source: Euromonitor, MKE Estimates
*Activities include Casinos, Culture, Heritage & Museum, Shopping,Medical Tourism,Spas,
National/Theme Parks, etc.

PHILIPPINES
MONETISING TOURISM OPPORTUNITIES

HOTEL SERVICES CAN OFFER DECENT RETURNS TO
DIRECT INVESTORS
Metro Manila hotels have average 66% occupancy rate Based on Euromonitor data, retail shopping accounts
for 19% of total tourist spending. The sector is,
Hotel Rooms in Metro Manila -LHS
however quite competitive, and dominated by retail
20,000 Metro Manila Hotel Occupancy Rate (%) -RHS 75 giants such as unlisted SM Retail , under SM
Investments (SM PM, BUY, TP: PHP985.0) and
70 Robinsons Retail (RRHI PM, Not Rated).
15,000
66.1 Department of Tourism studies indicate that Metro
65
10,000 Manila could have a room gap of 69,185 while Cebu-
Mactan will need 14,931 rooms from an expected
60
demand surge.
5,000
55
Foreign investors are restricted from owning land,
hence hotel investments can be done via partnership
- 50 with local investors or via land leases.
2012 2013 2014 2015 2016
Source: CEIC, Department of Tourism Budget and business hotels generate IRRs of 15%-16%.
Budget and business hotels generate an est. IRR of above 15%
Capex/ Average Average

Key room rate occupancy NPV IRR Payback
(PHPm) (PHP) rate (PHPm) (%) (years)
3 star budget, mid-market 0.72 2,000 65% 100 15.7 10-11

TAKEAWAY
4/5 star business hotels 2,13 5,000 65% 470 15.1 12-13
Lower priced hotels generate
5 star luxury hotels 7.27 15,000 65% 2,774 13.7 13-14 better IRRs.
Notes: Assumed average EBITDA margin of 30% , WACC of 9%

Source: MKE estimates, interviews with property developers, Arcadis

PHILIPPINES

LISTED PURE TOURISM PLAYS ARE LIMITED
Philippines’ annual scheduled domestic passenger traffic and market shares Cebu Pacific (CEB PM, BUY, TP PHP105)
by airline group
Philippines’ largest airline, dominates mass market and
2018 51% 30% 17% 24.8m LCC segments already operating at the lowest unit cost.
2017 55% 29% 14% 23.4m Deployment of six new Airbus A321-NEO in 2019 should
further improve cost efficiency and increase capacity.
2016 57% 30% 11% 22.1m
This makes them well positioned to capture the growth in
2015 60% 29% 11% domestic and outbound tourism. Despite superior ROEs
2014 60% 29% 10% 20.4m and a modestly geared balance sheet, CEB trades at the
lowest P/E, P/BV and EV/EBITDA among all Asia-Pacific
2013 50% 34% 8% 20.3m
airlines.
2012 46% 42% 1% 20.6m
0% 20% 40% 60% 80% 100% Megawide (MWIDE PM, Not Rated)
Cebu Pacific Philippine Airlines AirAsia Others
MWIDE operates Terminal 2 of the Mactan-Cebu
Source: CAPA - Centre for Aviation and Philippines Civil Aeronautics Board
International Airport, the second-largest airport in the
Philippines. Airport handling capacity has been expanded
to 12.5m passengers p.a. MWIDE plans to participate in
Steady passenger growth forecast for Cebu-Mactan airport favours MWIDE the Swiss challenge phase for the NAIA rehabilitation.
35,000 14%
MWIDE intends to put up a PHP3b 3-4 star hotel within
30,000 Total passengers Passenger growth 12% the airport complex as Cebu is currently 100% occupied.
25,000 10% The venture will be a 50:50 JV with GMR while operations
20,000 8% will be outsourced to an experienced hotel operator.
15,000 6%
10,000 4%
TAKEAWAY
5,000 2%
0 0% CEB PM and MWIDE PM could benefit from
2018 2020F 2022F 2024F 2026F 2028F 2030F 2032F 2034F 2036F 2038F
the ramp-up of airport infrastructure.
Source: Airport websites, company data, various news sources, CAPA

PHILIPPINES

INVESTING IN THE CASINOS
Manila’s integrated resorts’ VIP gross gaming revenue (GGR) Over the last four years, Manila’s integrated-resort VIP
sector grew at a 28% CAGR, aided by the licensing of
(PHPm) many Macau-based junkets. Mass-market gaming revenues
20,000 Resorts World Manila Solaire Resort & Casino grew an equally robust 22% CAGR. ‘Build and they will
City Of Dreams Manila Okada Manila come’ still applies. Two integrated resorts opened in the
15,000 last four years in Entertainment City and total gaming
revenue still grew.
10,000
Bloomberry Resorts (BLOOM PM, Not Rated), which
operates the Solaire Resort and Casino, had the largest
5,000
share in both VIP and mass market GGR in 2018 at 31.9%
and 34.9%, respectively.
-
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
Travellers International (RWM PM, Not Rated), operates
Resorts World Manila with a market share of 10.6% in VIP
Source: PAGCOR and 16.7% in mass market. The opening of its 2nd casino
Entertainment City could expand growth in the medium
Manila’s integrated resorts’ mass-market gross gaming revenue term.
(PHPm)
25,000 Alliance Global (AGI PM, Not Rated), parent company of
Resorts World Manila Solaire Resort & Casino
Travellers International (RWM PM, Not Rated) and
City Of Dreams Manila Okada Manila
20,000 Megaworld Corp. (MEG PM) offer exposure to both casinos
and hotels. AGI targets to double its hotel rooms to
15,000 12,000 in 3 to 5 years from 5,082 in 2018.
10,000
5,000 TAKEAWAY
- BLOOM PM and RWM PM are the listed
casino plays.
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
Source: PAGCOR

PHILIPPINES

PLAYING THE CASINOS
Average land price appreciation of key Metro Manila districts DM Wenceslao (DMW PM , BUY, TP 16.80) is a play on
Entertainment City, where DMW’s core asset, Aseana
City, (60% of NAV) is adjacent to. Land values in Manila
(PHP/sqm) Bay have risen by 15% YoY. The delay in the Manila Bay
700,000 reclamation project could drive prices even higher.
576,000 DMW currently trades at only one-third of our SOTP
600,000 560,000 NAV estimate of PHP33.7.
500,000 535,000
499,000
400,000
300,000 234,000 251,000
200,000 248,000
216,000
100,000
-
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018F
Makati CBD Ortigas CBD
Fort Bonifacio (BGC) Manila Bay Area
Source: Colliers
TAKEAWAY
DMW PM is a play on Entertainment City.

PHILIPPINES

PROPERTY DEVELOPERS ARE EXPANDING THEIR
HOTEL PORTFOLIOS
Hotel exposure of RLC Property companies have been investing in hotels, resorts
and ALI in the key and MICE ventures.
tourism clusters
Robinsons Land Corp’s (RLC PM, BUY, TP PHP28.30)
hotel exposure contributes 7% to its NAV. In 2018, it had
18 hotel properties (mainly company owned, Go Hotels,
Summit brands) with 2,736 rooms. Its target is to expand
to 3,770 rooms by 2020. Its Go hotel brand caters to
growing demand for ‘value’ in the provinces. Marketing
strategy is similar to its affiliate Cebu Air. Meanwhile, it
has JVs with Crowne Plaza, Holiday Inn and Dusit Thani.
Westin Hotel is set to open in 2020.
Ayala Land’s (ALI PM, BUY, TP PHP 55) hotel (Seda

brand) and high-end resorts contribute 4% to its NAV.
Completion of 3,096 rooms would double its hotel rooms
to 6,089 rooms over the next five years.
TAKEAWAY
NAV contribution Criteria ALI FLI MEG RLC SMPH VLL RLC PM and ALI PM are most active in
Hotels/MICE expanding their hotel portfolios among the
NAV Contribution
4% 0% 2% 7% 4% 0%
Hotels property developers in our coverage.
Source: Company Data

PHILIPPINES
VALUATION TABLE
Mkt YTD P/E (x) P/B (x) EPS growth (%) Yield (%) ROE (%)
Ticker Cap ADTV Price TP Upside Rec
Stock FY18A FY19F FY18A FY19F FY18A FY19F FY18A FY19F FY18A FY19F
(USDm) (USDm) (PHP) (PHP) (%)
Transport
Cebu Air Inc CEB PM 933 0.3 80.5 105.0 30.4 BUY 7.2 6.1 1.2 1.2 -20.6 16.3 5.8 11.6 9.8 18.7
Infrastructure
Megawide Construction MWIDE PM 908 1.4 22.6 na 5.7 NR 36.4 29.1 3.0 2.7 -13.8 25.2 0.3 0.3 8.8 10.6
Hotels & Integrated Resorts

Robinsons Land Corp RLC PM 2,453 1.2 24.5 28.3 15.5 BUY 18.6 13.4 1.4 1.3 -8.2 38.2 1.5 1.5 8.8 9.5
Ayala Land ALI PM 13,452 11.8 47.4 55.0 16.0 BUY 23.9 20.2 3.7 3.3 15.4 18.5 1.2 1.6 15.6 16.4
DM Wenceslao DMW PM 746 0.3 11.4 16.8 47.4 BUY 37.2 18.8 2.0 1.8 -46.6 97.7 0.0 1.5 0.1 0.1
SM PRIME Holding SMPH PM 22,765 6.2 40.9 37.7 -7.8 HOLD 36.1 32.5 4.3 3.9 18.7 11.0 0.8 0.9 11.9 12.1
Casinos
Bloomberry Resorts BLOOM PM 2,604 2.4 12.3 na 19.2 NR 17.3 14.3 3.1 2.6 28.9 20.7 0.9 1.0 19.4 19.7
Travellers Int’l Hotel RWM PM 1,716 0.1 5.7 na -28.6 NR 307.7 61.7 2.4 1.9 -91.6 399.1 0.7 0.4 0.8 4.2
Alliance Global Group AGI PM 2,948 2.5 15.3 na 19.2 NR 9.4 8.4 0.7 0.8 9.3 11.9 0.6 0.9 9.7 9.7
NR: Not Rated. Share prices are as at 3 May, 2019

Source: MKE estimates, Bloomberg consensus estimates

MALAYSIA
MALAYSIA
Samuel Yin Shao Yang (603) 2297 8916 samuel.y@maybank-ib.com
Wong Chew Hann (603) 2297 8686 wchewh@maybank-ib.com
TOURISM DYNAMICS ARE CHANGING

Total visitor arrivals have plateaued over the past five years due to
fewer visitor arrivals from Singapore.
That said, tourism receipts continue to grow thanks to a weaker MYR

and more higher spending Chinese and Indonesian visitors.
Yet, the hotel market in Kuala Lumpur and Selangor have seen
better occupancy days.
OTHER INTERESTING TOURISM NICHES

Chinese visitors spend more than any other major source of visitors.
Expect more Chinese to visit after recent re-warming of bilateral ties.
Chinese visitors have taken a particular liking to Sabah, a growing

ecotourism destination.
Malaysia is also emerging as a growing medical, retirement and

education tourism destination.
DOMESTIC IS FANTASTIC
Notwithstanding the above, domestic tourism will receive a catalyst
from rapid infrastructure development (e.g. ECRL).
Domestic tourism receipts are rapidly catching up to inbound

tourism receipts.
UNESCO WORLD HERITAGE SITE IN MALAYSIA
Kinabalu Park
Resorts World Genting is a prime beneficiary of growing domestic
tourism.
MALAYSIA
MACRO PERSPECTIVE
TOURISM INDUSTRY IS A SIGNIFICANT CONTRIBUTOR
TO THE ECONOMY
Gross value added in the tourism industry and % share of GDP The tourism industry has been rising in significance,
(MYR b) (% shr)
contributing 14.9% to Malaysia’s economy in 2017
MYR b (LHS) % shr (RHS) compared to just 10.4% in 2005.
14.9
250 14.4 14.8 16
13.4 13.7 Value added has grown at a CAGR of 11.2% from 2005
200 12.7 12.8 12.6 12.8 182.6 201.4 14
166.6 until 2017, contributed by retail trade (44.8% share in
151.8
11 11.2 136.1
150 10.4 10.5 124.3 12 2017), food & beverage serving services (16.3%) and
104.7 114.8 accommodation (12.8%).
86.5 90.7
100 73.5 10
56.4 62.9
50 8 Employment in the tourism industry has also risen in
tandem, to 3.4m pax in 2017 from 1.5m in 2005,
0 6 contributing 23.2% of total employment in 2017 (2005:
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
15.0%).
Source: Department of Statistics Malaysia
Most are employed in the retail trade industry (33.7%)
and food & beverage serving services (32.3%).
Employment in the tourism industry
Tourism employment (m) (LHS) % shr (RHS) 23.2

5 22.7 25
20.1 20.0 19.8 20.6 20.7
4 17.6 20
16.1 3.4
15.0 15.1 14.9 15.7 3.2
2.9 2.9
3 2.6 2.7 15
2.5
1.7 1.8
2.1 TAKEAWAY
2 1.5 1.6 1.6 10
With inbound tourism contributing
1 5
just 53.7% to total tourism
0 0 consumption (domestic: 46.3%), the
upside is significant.
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Department of Statistics Malaysia
MALAYSIA

FEWER SINGAPOREANS VISITING…
Total visitor arrivals to Malaysia (‘000) Total visitor arrivals to Malaysia eased 3.0% in 2017
before easing another 0.4% in 2018 to 25.8m.
30,000
25,000 This was due to fewer visitor arrivals from Singapore

caused by:
20,000
15,000 1. increased congestion at land checkpoints - due to

new biometric system;
10,000
5,000 2. lower SGD/MYR – peak: MYR3.17:SGD1.00 (Apr

2017), current: SGD3.04:SGD1.00.
-
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
In 2018, Singaporeans accounted for 41% of total
visitor arrivals to Malaysia, down 7ppts YoY.
Source: Tourism Malaysia
Breakdown of visitor arrivals to Malaysia, 2018

Others
India 17%
2%
South Korea Singapore
2% 41%
Brunei
5%
Thailand TAKEAWAY
8%
Fewer visitors from Singapore due to
China increased congestion and recovering MYR.
12% Indonesia
13%
MALAYSIA

… BUT MORE CHINESE ARE
Total visitor arrivals to Malaysia ex-Singaporeans (‘000) Total visitor arrivals to Malaysia ex-Singaporeans hit a
record high of 15.2m in 2018 (+13%).
16,000
14,000 Growth was driven by visitor arrivals from China,
12,000 which hit a record 2.9m (+29%) in 2018.
10,000
8,000
Chinese visitors to Malaysia still grew in 2H18 despite a
perceived fallout in diplomatic relations at that time.
6,000
4,000 Resumption of ECRL and acceptance of Huawei may
2,000 encourage more Chinese to visit Malaysia.
-
Chinese Ambassador expects Chinese visitors to grow
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
to 3.5-4.0m in 2019 (2.9m in 2018) and 5.0m in 2020.
Chinese visitor arrivals to Malaysia (‘000)

Chinese visitor arrivals ('000) Chinese visitor arrivals chg YoY
350 0.8
300 0.6
250
0.4
200
0.2
150
0.0
100 TAKEAWAY
50 -0.2
0 -0.4
More Chinese visitors moderated the
adverse impact of fewer Singaporean
Jan-10
Dec-12
Aug-14
Jan-15
Dec-17
Apr-11
May-13
Oct-13
Mar-14
Apr-16
May-18
Oct-18
Jun-10
Sep-11
Feb-12
Jun-15
Sep-16
Feb-17
Jul-12
Jul-17
Nov-10
Nov-15
visitors.
MALAYSIA
TOURISM DYNAMICS ARE ACHANGING

TOURISM RECEIPTS STILL GROWING IN MYR
TERMS BUT OFF PEAK IN USD TERMS
Tourism receipts, and tourism receipts per capita Although total visitor arrivals to Malaysia eased over
the past two years, tourism receipts continued to
3,500 Tourism receipts (MYRb) (RHS) 100 grow.
3,000 Tourism receipt per capita (MYR) (LHS)
80 Moreover, 2018 tourism receipts of MYR84.1b (+2%)
2,500 were a record high.
2,000 60
1,500 2018 tourism receipt per capita of MYR3.3k (+3%) was

40
also a record high.
1,000
20
500 The above is thanks to:- (i) weaker MYR; and (ii) more
0 0 Chinese and Indonesian visitor arrivals to Malaysia.
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Tourism receipts in USD peaked in 2014. Tourism
Source: Tourism Malaysia receipts in USD in 2018 were still only 5% below the
peak.
Tourism receipts (USDb) and average USD/MYR exchange rate
Tourism receipts (USDb)
25 4.4
Average USD/MYR exchange rate
4.2
20
4.0
15 3.8
10 3.6
3.4 TAKEAWAY
5
3.2
0 3.0
Visitor arrivals and tourism receipts are not
necessarily perfectly correlated.
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Source: Tourism Malaysia, Bank Negara Malaysia
MALAYSIA

TOURISM RECEIPTS EX-SINGAPOREANS STILL
GROWING IN MYR AND USD TERMS
Tourism receipts from Singaporeans Tourism receipts from Singaporeans accounted for 45%
of total tourism receipts pre-2018.
Tourism receipts - Singapore (MYRb) (LHS)
40 Tourism receipts - Singapore (USDb) (RHS) 12 Has been easing due to increased congestion at land
10 checkpoints and lower SGD/MYR exchange rate.
30
8 That said, tourism receipts from ex-Singaporeans are
growing in both MYR and USD terms.
20 6
4 Tourism receipts from Singaporeans accounted for a

10 lower 32% of total tourism receipts in 2018.
2
0 0 Growing tourism receipts ex-Singaporeans due to more

2014 2015 2016 2017 2018 high spending Chinese and Indonesian visitors.
Tourism receipts ex-Singaporeans
Tourism receipts Tourism receipts Visitor arrivals Tourism receipts

ex-SG ex-SG ex-SG ex-SG per capita
(MYRb) (USDb) (Million) (USD)
2014 40.3 12.3 13.5 911
2015 39.6 10.1 12.8 792
2016 44.0 10.6 13.5 788

TAKEAWAY
2017 45.2 10.5 13.5 778 More Chinese and Indonesian shoppers are
replacing fewer Singaporean shoppers.
2018 56.9 14.1 15.2 926
Source: Tourism Malaysia, Bank Negara Malaysia
MALAYSIA

HOTEL MARKET HAS SEEN BETTER OCCUPANCY
DAYS THOUGH
Hotel guests and number of hotel rooms in Malaysia 2018 total hotel guests in Malaysia of 82.4m (+7%) was
a record high.
Domestic guests (m) Foreign guests (m) Number of rooms
100 400,000 That said, number of hotel rooms in Malaysia of 308.2k
80 as of 2018 was still 4% from the 2016 record.
300,000
60
200,000 There is a glut of hotel rooms, especially in Kuala
40 Lumpur and Selangor. Airbnb has exacerbated the glut.
20 100,000
Yet, there is an incoming supply of 19.4k hotel rooms
0 - in Malaysia (Kuala Lumpur: 5.4k, Selangor: 1.7k).
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Expect ‘older’ hotels in Kuala Lumpur and Selangor to
Source: Tourism Malaysia be sold/demolished.
Average hotel occupancy rates of selected states in Malaysia Year Hotel Price/room (MYR)
2018 Hilton Garden Inn North 451,000
Johor Kuala Lumpur Penang Sabah Selangor 2018 Hilton Garden Inn South 451,000
80% 2017 Nova 414,286
2017 Geo 410,296
75%
2017 Sunway Clio 617,942
70% 2016 Renaissance 840,660
2016 Aloft Kuala Lumpur Sentral 868,672
65%
2015 DoubleTree by Hilton 718,518
60% Source: Various
55%
TAKEAWAY
50%
Unwise to invest in hotels in Kuala Lumpur
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
and Selangor as there is already a glut.

MALAYSIA

HAVE MORE CHINESE VISITORS TO BE THANKFUL FOR
2018 tourism receipt per capita by nationality (MYR) The improving tourism receipts is partially due to
more Chinese visitors to Malaysia.
4,500 4,179
4,000 Diplomatic ties rewarmed after Prime Minister’s 25-28
3,378
3,500 Apr 2019 visit to China for 2nd Belt & Road Summit.
3,000 2,568 2,490 Chinese Ambassador expects Chinese visitors to grow
2,500
1,996 to 3.5-4.0m in 2019 (2.9m in 2018) and 5.0m in 2020.
2,000
1,500 Average Chinese visitor to Malaysia spends MYR4.2k,
1,000 more than any other major source of visitors.
500
That said, there is still room for growth as average
- Chinese visitor to Thailand spends MYR6.9k (+65%) or
Singapore Indonesia China Brunei Thailand
65% more than they spend in Malaysia.
Chinese tourism receipts per capita (MYR)

4,500
4,000
3,500
3,000
2,500
2,000 TAKEAWAY
1,500
1,000 Chinese visitors spend a lot more than
500 others, and their per capita average
0 tourism receipts are growing.
2014 2015 2016 2017 2018
MALAYSIA

SABAH ECOTOURISM IN A LEAGUE OF ITS OWN
Chinese visitor arrivals to Sabah Total visitor arrivals to Sabah, both local and
international, have grown over the past three years.
China (LHS) China chg YoY (RHS)
70,000 150%
60,000 Kota Kinabalu International Airport operating at >90%
100%
50,000 utilisation rate. 1 of 7 profitable airports in Malaysia.
40,000 50%
Sabah has proven popular with Chinese visitors. A
30,000 0% record 594k (+38%) Chinese visited Sabah in 2018.
20,000
-50%
10,000 ~20% of all Chinese visitors to Malaysia visit Sabah.
- -100% Many do not even extend their trips to Peninsular.
Jan-19
May-17
Jan-18
May-18
May-15
Jan-16
May-16
Jan-17
Jan-13
May-13
Jan-14
May-14
Jan-15
Sep-17
Sep-18
Sep-15
Sep-16
Sep-13
Sep-14
2018 Sabah hotel guests of 7.4m was a record high.

Not much competition from Airbnb.
Source: Sabah Tourism
Rasa Ria Resort (Shangri-La) 2018 RevPar was MYR497
Sabah hotel guests and commanded 29% pre-tax profit margin.
8 Domestic hotel guests (m) Foreign hotel guests (m)

7
6
5
4
3
2
TAKEAWAY
1 We believe it is opportune to invest in
0
Kota Kinabalu International Airport and
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
hotels in Sabah.
MALAYSIA

MEDICAL TOURISM IN MALAYSIA TO CATCH UP WITH
SINGAPORE AND THAILAND?
Medical tourists to Malaysia and medical tourism receipts earned in Malaysia From 2010 to 2018, medical tourists doubled to 1.2m
Medical tourism receipts (MYRb) Medical tourists (m)
and medical tourism receipts tripled to MYR1.5b.
2.0
Penang alone accounts for ~40% of medical tourism
receipts in Malaysia. Popular with Indonesians.
1.5
IHH Healthcare’s EBITDA margin ranges from 25-30%
1.0 and it targets EBITDA break-even in 3-5 years.
That said, the hotel market in Penang has been

0.5
plateauing due to competition from Airbnb.
- Expect Johor to gain popularity with Singaporeans due

2011 2012 2013 2014 2015 2016 2017 2018 to changes in Singaporean insurance policies.
Source: Malaysia Healthcare Travel Council
MHTC expects medical tourism receipts to grow 25% to
Penang hotel guests MYR1.8b this year.
Domestic hotel guests (m) Foreign hotel guests (m)
8
7
6
5
4
3
TAKEAWAY
2
1 Invest in hospitals in Penang and Johor. Do
0 not invest in hotels there though.
2011 2012 2013 2014 2015 2016 2017 2018
MALAYSIA

MALAYSIA INCREASINGLY A RETIREMENT
DESTINATION/SECOND HOME OF CHOICE
Malaysia My Second Home Participants Approvals Malaysia ranks well globally in terms of cost of living
4,000 and quality of healthcare. Ties in to medical tourism.
3,500
As at Aug 2017, there were 35.8k Malaysia My Second
3,000 Home participants contributing ~MYR13b to the
2,500 economy.
2,000
Most participants were from China and based in Johor
1,500 due to the presence of Chinese developers there.
1,000
500 Chinese also like Penang. Western participants prefer
Penang and Langkawi.
-
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
8M17
Property overhang is high in Johor and Penang. Growth
opportunities are in education.
Source: Malaysia My Second Home
Malaysia My Second Home Participants By Country as at Aug 2017 Sunway Education Group EBITDA margins hover at
Others
~15%. Higher for non-research education institutions.
India
Pakistan
Korea
Taiwan
Singapore
Iran
United Kingdom TAKEAWAY
Bangladesh
Japan Invest in schools in Johor and Penang. Do
China not invest in property there though.
- 2,000 4,000 6,000 8,000 10,000 12,000
Source: Malaysia My Second Home
MALAYSIA

MALAYSIA ALSO AN INCREASINGLY POPULAR
DESTINATION FOR HIGHER EDUCATION
Number of international students in Malaysia and Singapore, 2017 Malaysia has >500 institutions of higher learning, of
which 13 are international branch campuses:-
180,000 170,068
160,000 1. Monash University
140,000 2. Swinburne University of Technology
120,000 3. Curtin University of Technology
100,000 4. Management Development Institute of Singapore
70,000 5. The University of Nottingham
80,000
6. Newcastle University Medicine
60,000 7. Raffles University
40,000 8. ESMOD
20,000 9. University of Southampton
0 10. University of Reading
Malaysia Singapore 11. Heriot-Watt University
12. Xiamen University
Source: Ministry Of Higher Education Malaysia, Various
13. Asia School of Business – MIT Sloan
Number of international students in Malaysia by country, 2017
Low tuition fees, low cost of living and wide use of
Others
English as language of instruction are key draws.
Iran
Sudan
In 2017, there were 170k international students of
Iraq higher learning in Malaysia (>2x that in Singapore).
Libya
Pakistan MOHE expects 200k international students contributing
Yemen MYR19b to economy by 2020.
Indonesia
Nigeria TAKEAWAY
China We believe it is opportune to invest in
Bangladesh
universities and student accommodations.
0 10,000 20,000 30,000 40,000 50,000 Xiamen University tapping into Belt & Road
Source: Ministry Of Higher Education Malaysia
MALAYSIA
DOMESTIC TOURISM RESILIENT AND A MAJOR
EMPLOYER
Domestic tourism expenditure (MYRb) and average USD/MYR exchange rate Since 2000, domestic tourism expenditure has grown
7x. Was catalysed by the MYR depreciation in 2015.
80 Domestic tourism expenditure (MYRb) (LHS) 4.5
Average USD/MYR exchange rate(RHS) Domestic tourism receipts ought to have already
60 caught up with inbound tourism receipts in 2018.
4.0
Currently, domestic tourism receipts account for 10%
40
of private consumption expenditure. Jumped in 2014
3.5 due to KLIA?
20
Domestic tourism expenditure accounts for 14% of
0 3.0 China’s private consumption expenditure due to its
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
good infrastructure.
Source: Department Of Statistics Malaysia, Bank Negara Malaysia Improved infrastructure (e.g. ECRL) in Malaysia is
crucial to improving domestic tourism.
Domestic tourism expenditure as % of private consumption expenditure
Tourism industry employed 3.4m people or 23% of all
Domestic tourism expenditure as % of private consumption expenditure (LHS) employment in Malaysia in 2017.
MAHB domestic passenger movements (m) (RHS)
10% 50
9% 40
8% 30
7% 20 TAKEAWAY
6% 10
Domestic tourism is just as significant as
5% 0 inbound tourism.
2010 2011 2012 2013 2014 2015 2016 2017
Source: Department Of Statistics Malaysia, Malaysia Airport Holdings
MALAYSIA
INFRASTRUCTURE GROWTH TO DRIVE
DOMESTIC TOURISM
Proposed infrastructure developments in Malaysia East Coast Rail Line will greatly improve accessibility
of east coast islands (e.g. Redang, Perhentian).
Construction of Resorts World Genting Outdoor Theme

Park currently stalled. Could be completed by end-
2020/2021.
Bukit Kayu Hitam CIQ East Coast Rail Line Major infrastructure developments also planned for
- 24hours w.e.f. Apr 2019 - 20 stations along 640km
- Planned 300km railway line - Expected completion in 2026
the northwest of Peninsular in Kedah and Penang.
- Songkhla-Penang - Tok Bali station
Expect it to reinforce Penang island as a popular local
tourism destination.
Also, watch Penang mainland as it is located in the

middle of the major infrastructure developments.
Swettenham Pier Cruise Terminal Kulim International Airport

IKEA opened in Batu Kawan on 14 Mar 2019. Golf
- Penang Port-Royal Carribean JV - MYR1.6b investment course and theme parks are planned for Batu Kawan.
- 400m to 620m berth expansion - Primarily cargo hub
- 1.7m pax capacity by 2021 - No development timeline yet
TAKEAWAY
Penang International Airport RWG Outdoor Theme Park
- MYR1.2b expansion - 25 rides over 25 acres Consider investing in Kelantan,
- Currently stalled
- Handled 7.8m in 2018
- 6.5m to 16.0m capacity by 2023 - Estimated completion in
Terengganu and mainland Penang.
2020/2021
Source: Various newspapers, Penang Port, MyHSR Corporation,

Genting Malaysia, Maybank Kim Eng
MALAYSIA
MALAYSIA GAMING RELATIVELY RESILIENT
Resorts World Genting gross revenue (MYRm) Little correlation between Resorts World Genting
8,000 (RWG) gaming revenue and total visitor arrivals to
Malaysia in the past five years.
7,000
6,000
This is because more than 75% of RWG’s gamblers are
5,000 locals.
4,000
3,000 Foreign gamblers avoided RWG during the SARS
2,000 pandemic (2003) and Global Financial Crisis (2008).
1,000
0 That said, RWG revenue was relatively unscathed in
those years.
1998A
1999A
2000A
2001A
2002A
2003A
2004A
2005A
2006A
2007A
2008A
2009A
2010A
2011A
2012A
2013A
2014A
2015A
2016A
2017A
2018A
To be sure, RWG is still targeting more foreign
Source: Genting Malaysia, Maybank Kim Eng gamblers with its Genting Integrated Tourism Plan
investments.
Total visitor arrivals to Malaysia (‘000)
30,000
25,000
20,000
15,000
10,000 TAKEAWAY
5,000 As a base for local gamblers, Resorts World
-
Genting revenues are relatively resilient
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
MALAYSIA
MALAYSIA TOURISM RESEARCH UNIVERSE

NEGATIVE ON AIRLINES BUT SELECTIVELY POSITIVE
ON OTHERS
Malaysia tourism – peer valuation summary
Shr px Mkt cap TP PER (x) PER (x) PER (x) PBV (x) PBV (x) ROE (%) ROE (%) Div yld (%)
Stock Rec
MYR MYRm MYR CY18A CY19E CY20E CY18A CY19E CY18A CY19E CY19E
AirAsia Sell 2.68 8,956 2.28 9.4 9.6 9.4 1.4 1.4 9.4 14.6 4.5
AirAsia X Sell 0.24 975 0.14 na 26.1 na 1.7 1.8 na na 0.0
Genting Buy 7.00 26,954 9.60 12.4 10.5 7.8 0.8 0.7 7.8 6.0 2.4
Genting Malaysia Hold 3.22 18,205 3.40 15.3 12.5 11.1 0.9 0.8 11.1 6.3 2.0
IHH Healthcare Buy 5.61 49,196 6.90 45.2 43.8 38.7 2.1 2.2 4.7 4.9 0.5
KPJ Healthcare Hold 1.00 4,407 1.08 25.5 25.5 24.3 2.2 2.0 8.6 7.7 2.0
Atlan Holdings Buy 4.50 1,141 5.70 28.1 26.8 7.1 3.2 3.6 7.1 11.8 4.1
IGB REIT Hold 1.87 6,619 1.85 20.5 19.7 8.1 1.7 1.8 8.1 8.5 4.7
KLCC Prop Hold 7.78 14,045 7.85 19.2 18.6 5.5 1.1 1.0 5.5 5.4 4.3
Pavilion REIT Hold 1.80 5,470 1.65 20.9 20.5 6.4 1.4 1.3 6.4 6.4 4.6
Sunway REIT Hold 1.87 5,507 1.90 18.2 17.0 6.5 1.3 1.3 6.5 6.9 4.9
YTL REIT Buy 1.31 2,233 1.50 14.1 13.2 5.6 0.8 0.8 5.6 5.9 5.6
Yong Tai Hold 0.38 200 0.37 na na na 0.3 0.3 na na 0.0
Source: Bloomberg, Maybank KE. Share price as at 26 Apr 2019 closing.
AirAsia and AirAsia X are suffering from low yields, low load factors and
rising fuel prices.
Although Genting Malaysia’s RWG revenue is relatively resilient, RWG was

hit by a casino duty rate hike of 10ppts effective 1 Jan 2019. We prefer
Genting as a cheaper proxy to GENS’ potential expansion into Japan.
IHH Healthcare is a potential medical tourism proxy. We also like:- (i)

Atlan Holdings due to its undervalued assets, strong balance sheet, M&A
potential and recovery of its duty free segment; and (ii) YTL REIT due to
its rich pipeline of assets and resilient leasing earnings.
AVIATION
AVIATION
Mohshin Aziz (603) 2297 8692 mohshin.aziz@maybank-ib.com
ASEAN AIRLINES HAVE GROWN STRONGLY

ASEAN was the fastest growing passenger market globally during the
past 10-years (2008 – 2018).
More growth to come fueled by economic expansion and the

emergence of middle-income group.
NOT ALL ARE MADE EQUAL

Industry maturity between Asian nations varies tremendously due to
infrastructure, regulatory constraints and affordability issues.
ASEANS HAVE EMBRACED LCC WHOLEHEARTEDLY

ASEAN is the global leader in low cost travel.
SINGAPORE’S CHANGI AIRPORT
AVIATION
ASEAN AIRLINES HAVE GROWN STRONGLY

NESTLED IN THE FASTEST GROWTH REGION
IN THE WORLD
Passengers carried by local registered carriers ASEAN is the 4th largest air passenger market after the
US, EU and China.
(millions) ASEAN CHINA INDIA
551
600
ASEAN carriers have the highest 10-year CAGR —
500 10 year CAGR (2007:20017)
surpassing China & India.
ASEAN = +12.6% 371
400
China = +11.6%
India = +10.4%
Committed for growth, ASEAN carriers placed huge
300
aircraft orders of which 70% are for LCCs.
200 140
100
0
1990 1995 2000 2005 2010 2015
Source: International Civil Aviation Organisation (ICAO)
Southeast Asia’s fleet in service: Boeing 20 year forecast
TAKEAWAY
We’re still in the early days, more growth
to come for much longer.
Source: Boeing
AVIATION
AVIATION INDUSTRY IS SUSTAINABLE

PROFITABLE BUT WITH ELEMENTS OF CYCLICALITY
ASEAN Aviation sector net profit (USD billion) Airlines are notoriously cyclical due to various
variables (fuel price, industry supply-demand,
consumer sentiment, FX movement).
Airlines Airports Support Services
(USD b)
Airport profits are most stable as they relate to
4 passenger growth and utilisation rate.
0.5 0.6
Aviation support services are fairly stable, but have
0.5
0.3 less growth prospects as compared to airports.
0.7
3 0.2
0.6 1.3
0.2 1.0
0.2
0.1
0.3 0.3
2
0.4
0.6
2.6 2.7
2.5
2.3 2.2 2.2
1
1.6
1.4
0.3
0.5
0
2010 2011 2012 2013 2014 2015 2016 2017 2018
-0.7
TAKEAWAY
-1 Passenger traffic growth alone does not
translate into profit growth.
Sources: Bloomberg, various companies
AVIATION
POISED FOR FURTHER GROWTH

DRIVEN BY GDP GROWTH AND RISE OF
MIDDLE-INCOME CLASS
Passengers carried by ASEAN carriers and ASEAN GDP per capita Strong correlation between GDP/capita and air travel
growth.
(million) Passengers carried (LHS) GDP / capita (RHS) (USD)
500 5,000
Middle income entrants will likely fuel demand for air
400 4,000 travel and tourism.
300 R2 = 0.94 3,000 ASEAN’s middle income population grew by 4.3% p.a.
200 2,000 in the past 10-years (2008-2018) — 3.3x more vs 1.3%
p.a. total population growth.
100 1,000
0 0
1990 1995 2000 2005 2010 2015
Sources: World Bank, ICAO
Estimated number of new middle income class* in 2030
TAKEAWAY
ASEAN is nestled in the middle of fastest
middle income population growth globally.
* Middle class is defined as those households with daily expenditures between USD10 and USD100 per
person in purchasing power parity terms
Sources: OECD research, Brookings
AVIATION
MANY HAVE YET TO FLY

PROPENSITY TO FLY SIGNIFICANTLY BELOW
GLOBAL AVERAGE
Airline passenger trips and GDP per capita Airline passenger trips and GDP per capita
GDP / capita
(trips p.a.) Trips / year
(USD)
Myanmar 1,151 0.04
7
Cambodia 1,163 0.07
Singapore India 1,640 0.08
6 R² = 0.7203 Laos 2,212 0.18
China 8,167 0.32
Philippines 2,883 0.32
5 Vietnam 2,086 0.33
Indonesia 3,368 0.35
ASEAN 3,913 0.47
4
World Average 10,880 0.70
Thailand 5,968 0.81
3 Brunei Europe 32,206 1.23

West Europe Avg. high-income nation 20,000 1.48
Malaysia 9,512 1.61
High-income
2 Malaysia North America 55,153 1.65
nation average
Brunei 31,386 2.75
North America Singapore 55,330 6.02
1 Thailand Europe
World average
China
0
TAKEAWAY
0 10,000 20,000 30,000 40,000 50,000 60,000
Majority of ASEAN countries are just
USD / capita embracing air travel.
Sources: World Bank, ICAO
AVIATION
…AND MANY MORE WANT TO FLY

CONSUMER BEHAVIOUR IS CHANGING
ASEAN average length of stay of trip Trend has moved towards shorter length of stay.
(days)
10 However, taking more frequent trips.
9 Objective/s for travel have changed (previously was

for visiting family/friends or pilgrimage).
8
5
2007 2009 2011 2013 2015 2017
Source: CEIC
Types of emerging travellers in Asia Pacific
TAKEAWAY
Simplicity, connectivity and
geographical proximity will dominate
future tourist trends.
Source: Sabre, Asia Pacific Regional Tourism Trends @ May 2018
AVIATION
NOT ALL ARE MADE EQUAL

INDUSTRY MATURITY VARIES TREMENDOUSLY
Typical stages in the aviation industry
Xxxxxx add comments

Frontier countries waiting for a catalyst to
move them into the rapid growth stage.
China, India and Indochina are enjoying a

Singapore Brunei steep growth stage.
Australia
Malaysia
Hong Kong
The more established air markets
Thailand Macau
Indonesia, Philippines
(Malaysia, Thailand, Singapore) are
Japan entering into the mature stage.
Vietnam South Korea
China Taiwan
India
New Zealand
Cambodia
Laos
Myanmar
Bangladesh
Source: Frost & Sullivan Aviation Research
TAKEAWAY
There are various growth phases and
risk profiles within the ASEAN region.
AVIATION

LCC IS THE FAST REVVING ENGINE OF GROWTH
LCC market share LCC ticks all the boxes for the burgeoning middle-
2008 2018 income passengers (value for money, efficient
schedule).
41% LCC cannibalizing traffic from trains, coach and

48% 32%
ferries/boats.
36%
29% 17%
34% 12%
27% 25% 28%
14% 8% 9%
Europe
America
America
ASEAN
Asia Pacifc
Middle East
Africa
North
Latin
Source: Centre of Asia Pacific Aviation (CAPA)
Air passenger growth rates for full service carriers (FSC) and LCC
FSC growth rate LCC growth rate
ASEAN CAGR 2.4% 13.0%
Asia Pacific CAGR 4.1% 10.0%

TAKEAWAY
Europe CAGR 3.4% 8.7%
ASEAN started late in its exposure to LCC,
North America CAGR -3.3% 3.9% but has emerged as the global leader
Sources: CAPA, IATA, Maybank KE
AVIATION

LCC IS DOMINATING FAST
LCC market share for domestic market LCC has dominated domestic ASEAN market (China was
limited by regulatory constraint).
2008 2018
Average growth = +20ppt
57% LCC is gaining popularity on short-haul international.
70% 72%
64%
53% 56%
50% 45% 48%

10% 40% 32%
26%
2%
China
India
Thailand
Indonesia
Malaysia
Philippines
Vietnam
Source: CAPA
LCC market share for international market
2008 2018
Average growth = +17ppt

51%
40%
32% 31% 32% 33%
24% 25% 23%
26% 29%
14% 14% 13% 11% 15% 12% 11% 12% TAKEAWAY
3%
LCC is nearly done for domestic; the
China
India
Thailand
Indonesia
Singapore
Malaysia
Myanmar
Cambodia
Philippines
Vietnam
international sector is the next

battleground.
Source: CAPA
AVIATION
AVIATION AS AN INVESTMENT
YOU NEED TO GRASP THE CYCLICALITY IN ORDER TO
MAKE MONEY
Asia Pacific Airlines Index since 2010 Airlines are notoriously cyclical due to several
variables (fuel price, industry supply-demand,
Full Service Carriers Low Cost Carriers
140 consumer sentiment).
120
Airports proven to provide a far more stable return
100 profile.
80
60 Aviation support services are cyclical too, but less
pronounced as compared to airlines.
40
20 Market capitalisation (USD b)
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (USD b) Airlines Airports
120
Support Services
Source: Bloomberg
100
Asia Pacific Airlines PER 80
60
Full Service Carriers Low Cost Carriers
40
50
20
40
0
30 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: Bloomberg
20
10
TAKEAWAY
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Traffic growth alone does not guarantee
Source: Bloomberg
positive investment returns.
AVIATION
VALUATION TABLE
Price TP Up / MCAP PE (x) EV/EBITDAR (x) P / Book (x) ROE Gearing

Stocks Ticker Rating
(lcl crcy) (lcl crcy) (down) (USD b) 2019F 2020F 2019F 2020F 2019F 2020F (%) (%)
Full service carriers

Bangkok Airways BA TB NR 11.9 na na 0.8 57.8 35.5 12.5 11.2 0.81 0.85 2.0 32
Garuda Indonesia GIAA IJ NR 436 na na 0.8 15.3 5.1 7.1 5.7 0.85 1.17 8.1 161
Singapore Airlines SIA SP BUY 9.73 11.20 15.1% 8.4 15.9 13.7 6.9 6.0 0.94 0.87 5.1 3
Thai Airways THAI TB NR 12.60 na na 0.9 na 10.9 7.8 6.8 1.35 1.18 na 673
FSC simple average 29.6 16.3 8.6 7.4 0.99 1.02 5.1 217
Low cost carriers

AirAsia AAGB MK SELL 2.71 2.25 -17.0% 2.2 9.5 8.9 4.4 4.0 1.16 1.01 10.7 -35
AirAsia X AAX MK SELL 0.24 0.14 -42.6% 0.2 21.4 15.7 8.1 6.5 1.69 1.07 n.a 67
Asia Aviation AAV TB HOLD 4.34 4.50 3.7% 0.7 20.4 13.2 10.1 9.1 1.03 1.00 5.4 58
Cebu Air CEB PM BUY 80.50 105.00 30.4% 0.9 6.5 5.5 5.0 4.4 1.21 1.04 16.9 92
NOK Airlines NOK TB NR 2.14 na na 0.2 na na 4.0 n.a n.a 0.99 na na
IndiGo INDIGO IN NR 1,584 na na 1.7 na 20.5 na 11.5 8.6 8.6 na -148
SpiceJet SJET IN NR 130.50 na na 1.1 na 33.9 1344.1 17.1 n.a n.a 132.8 na
Spring Airlines 601021 CH NR 42.01 na na 5.7 20.1 16.6 12.9 10.9 2.9 2.7 13.6 32.5
LCC simple average 15.6 16.3 7.4 9.1 1.27 1.02 11.6 11
Airports
Airports of Thailand AOT TB BUY 69 75.00 8.7% 30.5 35.3 32.2 22.9 20.8 6.20 5.70 18.2 13
Airports of Vietnam ACV VN NR na na 7.7 28.1 25.0 14.4 12.6 5.10 4.40 20.3 53
Airport simple average 27.8 25.1 14.9 13.4 4.20 3.77 15.0 43
NR: Not Rated. Share prices are as at 3 May, 2019

Source: MKE estimates, Bloomberg consensus estimates
GAMING
GAMING
Samuel Yin Shao Yang (603) 2297 8916 samuel.y@maybank-ib.com
CHINA THE KINGMAKER

China’s foreign policy can make or break Asian gaming jurisdictions.
Philippines and Cambodia have been market-share gainers ,while

Australia and South Korea have been market-share losers.
MIND THE RETURNS GAP

Asian governments are increasingly turning to integrated resorts for
tax revenues. A couple have already hiked gaming tax rates.
Meanwhile, Asian governments are cajoling gaming companies to re-

invest/invest more.
FROM FRIEND TO FOE?

Macau-based junkets have been instrumental in the success of Asian
VIP markets.
But Macau-based junkets are increasingly owning integrated resorts

themselves, posing a competitive risk to incumbents. RESORTS WORLD, GENTING HIGHLANDS MALAYSIA
GAMING
CHINA THE KINGMAKER

CHINA HAS MADE SOME ASIAN GAMING JURISDICTIONS…
Manila integrated resorts VIP gross gaming revenue (PHPm)
Resorts World Manila Solaire Resort & Casino City Of Dreams Manila Okada Manila Philippines and Cambodia are perhaps China’s closest
20,000 friends in South East Asia.
15,000 Both countries eased visa requirements for Chinese

visitors. China reciprocated by encouraging Chinese to
10,000 visit both countries.
The impact has been most keenly felt in their VIP

5,000
markets. In Manila, Philippines, the VIP market nearly
tripled over the past four years.
-
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
In Phnom Penh, Cambodia, NagaWorld’s VIP market
nearly sextupled over the past four years.
Source: PAGCOR
In Sihanoukville, Cambodia, Chinese gamblers have
driven economic growth there.
NagaWorld VIP volume (USDm)
12,000
10,000
8,000
6,000
4,000
2,000 TAKEAWAY
0 Gaming jurisdictions often benefit greatly
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
1Q19
from warmer ties with China.
Source: NagaCorp
GAMING
CHINA THE KINGMAKER

…BUT IT HAS BROKEN OTHERS
Crown Resorts VIP volume (AUDb)
40 Crown Melbourne VIP volume (AUDb) Crown Perth VIP volume (AUDb) On the other hand, Australia has had an often testy
relationship with China.
35
30 In Oct 2016, 18 Crown Resorts employees were
25 arrested in China for marketing their integrated
20 resorts to Chinese VIPs.
15
Chinese VIPs all but ceased visiting Australian
10
integrated resorts in 2H16/1H17, even those not
5 owned by Crown Resorts.
0
1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 Chinese VIPs returned to Australian integrated resorts
Source: Crown Resorts in 2H17/1H18, albeit, through Macau-based junkets.
Star Entertainment VIP volume (AUDb) That said, fewer Chinese visited Australian integrated
resorts from 2H18 onwards after Australia fell out with
The Star Sydney VIP volume (AUDb) Queensland casinos VIP volume (AUDb) China over Huawei-ZTE.
35
30
25
20
15
10 TAKEAWAY
5 China has used Chinese VIPs as leverage
0
against countries it is unfriendly with.
1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18
Source: BPS, CEIC
GAMING
CHINA THE KINGMAKER

SOUTH KOREA AN INTERESTING CASE OF REDEMPTION
Grand Korea Leisure and Paradise VIP buy in (KRWb) In Oct 2015, 13 Grand Korea Leisure and Paradise
employees were arrested in China for marketing their
Paradise VIP buy-in (KRWb) Grand Korea Leisure VIP buy-in (KRWb) casinos to Chinese VIPs.
2,500
2,000
Consequently, fewer Chinese VIPs visited South Korean
casinos from 3Q15 onwards.
1,500
South Korea-China relations took another turn for the
1,000 worse in mid-2016 when the former deployed the
THAAD missile defense system.
500
This exerted downward pressure on the South Korean
-
VIP market until 1Q18.
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
Source: Grand Korea Leisure, Paradise
As South Korea and China reconciled in 2018, Chinese
VIPs returned to South Korean casinos.
Grand Korea Leisure and Paradise Chinese VIP buy in (KRWb)

Grand Korea Leisure Chinese VIP buy-in (KRWb) Paradise Chinese VIP buy-in (KRWb)
1,600
1,400
1,200
1,000
800
600
400 TAKEAWAY
200
-
China’s use of Chinese VIPs as leverage
against countries it is unfriendly with is not
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
irreversible.
Source: Grand Korea Leisure, Paradise
GAMING
MIND THE RETURNS GAP

CASINO TAX RATES AND/OR CAPEX COMMITMENTS
BEING HIKED Malaysian casino tax rates were hiked by a hefty
10ppts on 2 Nov 2018.
Tax rates of selected Asian gaming jurisdictions
On 3 Apr 2019, Singapore announced that casino entry
levies will be hiked by 50% the day after and said
casino tax rates will be hiked in Mar 2022.
Furthermore, the Singaporean GST rate is scheduled to

be hiked by 2ppts to 9% from 2021 to 2025.
Malaysian casino tax rate hikes came after Resorts

World Genting invested MYR8b (USD2b).
On 3 Apr 2019, Singapore also announced the

Singaporean integrated resorts will invest SGD4.5b
(USD3.5b) each in mostly non-gaming attractions.
a) PH, KH and MO casinos exempt from corporate tax; c) another 2% of non-junket VIP GGR levied in PH.
b) MY/SG casino tax rates includes SST/GST of 6%/7%;
Risk is that companies operating in other jurisdictions
Source: MOF, IRAS, PAGCOR, NagaCorp, DICJ will be subject to casino tax rate hikes and/or large
capex commitments.
Singapore casino tax rate structure Japan is likely to call for RFPs in 4Q19/1Q20. Casino
Mass tax rates, corporate tax rate and capex commitments
Casino tax rate as % of GGR VIP are the wildcards.
market
Current until Feb 2022 5% 15%
After Mar 2022 with 10-year moratorium TAKEAWAY

- First SGD2.4b of VIP GGR/SGD3.1b or mass market GGR 8% (+3ppt) 18% (+3ppt) Asian governments are increasingly savvy in
extracting tax revenues and investments.
- VIP GGR > SGD2.4b/mass market GGR > SGD3.1b 12% (+7ppt) 22% (+7ppt)
Source: Ministry Of Finance Singapore
GAMING
FROM FRIEND TO FOE?

JUNKETS INCREASINGLY OWNING INTEGRATED
RESORTS THEMSELVES Macau-based junkets have been instrumental in the
success of Asian VIP markets, especially the Philippine
Artist impression of Hoiana integrated resorts and Cambodian ones.
But Macau-based junkets are increasingly owning
integrated resorts themselves, posing a competitive
risk to incumbents.
Suncity, Macau’s largest junket, owns 34% of the
USD4b Hoiana in Da Nang, Vietnam, which will open by
4Q19. Suncity has/will also:-
• Acquired 28% of Summit Ascent, which owns and

operates Tigre De Cristal casino in Vladivostok,
Russia;
• Provides consultancy services to a USD360m
integrated resort in Sihanoukville, Cambodia
which will open by 1Q20;
Source: Hoiana
• Entered into agreements to provide technical
Tigre De Cristal casino and pre-opening services to a USD2b integrated
resorts in Van Don, Vietnam;
• Entered into a MOU with Paradise on possible
cooperation at Paradise Casino Busan, South
Korea.
Suncity is also interested in a Macau casino
concession. The first round of Macau casino
concessions expire in 2022.
TAKEAWAY
Asian gaming companies are likely have to
Source: Summit Ascent compete with their junkets going forward.
APPENDIX
ASEAN-6 KEY MACROECONOMIC INDICATORS
Real GDP growth (%) Headline Inflation (%, average) Policy Rate (%, year-end)
2016 2017 2018 2019E 2020E 2016 2017 2018 2019E 2020E 2016 2017 2018 2019E 2020E
Global 3.2 3.8 3.6 3.3 3.1 2.8 3.2 3.6 3.6 3.6 -
US 1.5 2.2 2.9 2.5 2.0 1.3 2.1 2.4 2.0 2.7 0.625 1.375 2.375 2.375 2.375
Indonesia 5.0 5.1 5.2 5.1 5.3 3.5 3.8 3.2 3.4 3.6 4.75 4.25 6.00 6.00 6.00
Malaysia 4.2 5.9 4.7 4.7 4.7 2.1 3.8 1.0 1.5 2.4 3.00 3.00 3.25 3.00 3.00
Philippines 6.9 6.7 6.2 6.5 6.5 1.3 2.9 5.2 3.0 2.8 3.00 3.00 4.75 4.25 4.00
Singapore 2.8 3.9 3.2 1.8 2.1 (0.5) 0.6 0.4 1.2 1.0 0.97 1.50 1.89 2.00 2.00
Thailand 3.4 4.0 4.1 3.6 3.6 0.2 0.7 1.1 1.1 1.0 1.50 1.50 1.75 1.75 2.00
Vietnam 6.2 6.8 7.1 6.8 6.5 2.6 3.5 3.5 3.0 4.1 6.50 6.25 6.25 6.25 6.25
Exports of Goods & Services (%) Gross Fixed Capital Formation (%) Private Consumption (%)
2016 2017 2018 2019E 2020E 2016 2017 2018 2019E 2020E 2016 2017 2018 2019E 2020E
Indonesia (1.7) 8.9 6.5 4.2 4.8 4.5 6.2 6.7 6.6 7.1 5.0 4.9 5.0 5.0 5.1
Malaysia 1.3 9.4 1.5 2.0 2.7 2.7 6.2 1.4 2.1 2.8 6.0 7.0 8.1 6.5 6.4
Philippines 11.6 19.5 11.5 9.5 9.9 26.1 9.5 14.0 11.5 11.5 7.1 5.9 5.6 5.6 5.7
Singapore 0.8 5.4 5.2 2.3 2.1 0.9 5.3 (3.4) 2.6 2.0 2.2 3.2 2.4 1.6 2.2
Thailand 2.8 5.4 4.2 2.2 3.4 2.9 1.8 3.8 4.0 3.0 2.9 3.0 4.6 4.1 3.7
Vietnam 13.9 16.7 14.3 11.6 12.5 9.9 8.9 8.2 8.4 8.5 7.3 7.4 7.2 7.1 7.0
Source: CEIC, Maybank Kim Eng
APPENDIX
ASEAN FORECAST TABLES
Indonesia - Key Macroeconomic Indicators
2015 2016 2017 2018 2019E 2020E

Real GDP (%) 4.9 5.0 5.1 5.2 5.1 5.3
Private Consumption (%) 5.0 5.0 4.9 5.0 5.0 5.1
Government Consumption (%) 5.3 (0.1) 2.1 4.8 1.5 2.0
Gross Fixed Capital Formation (%) 5.0 4.5 6.2 6.7 6.6 7.1
Exports of Goods & Services (%) (2.1) (1.7) 8.9 6.5 4.2 4.8
Imports of Goods & Services (%) (6.2) (2.4) 8.1 12.0 7.3 4.7
Current Account Balance (% of GDP) (2.0) (1.8) (1.7) (3.0) (2.5) (2.2)
Fiscal Balance (% of GDP) (2.8) (2.5) (2.5) (1.8) (1.9) (1.8)
Inflation Rate (%, period average) 6.4 3.5 3.8 3.2 3.4 3.6
Unemployment Rate (%, period average) 6.2 5.6 5.5 5.3 5.1 5.0
Exchange Rate (per USD, end-period) 13,795 13,436 13,548 14,390 12,900 12,800
Benchmark Interest Rate (% p.a., end-period) 6.25 4.75 4.25 6.00 6.00 6.00
Malaysia - Key Macroeconomic Indicators

2015 2016 2017 2018 2019E 2020E
Real GDP (%) 5.1 4.2 5.9 4.7 4.7 4.7
Government Consumption (%) 4.5 0.9 5.4 3.3 1.5 2.5
Exports of Goods & Services (%) 0.3 1.3 9.4 1.5 2.0 2.7
Imports of Goods & Services (%) 0.8 1.3 10.9 0.1 1.4 2.7
Current Account Balance (% of GDP) 3.0 2.4 3.0 2.3 2.4 2.4
Inflation Rate (%, average) 2.1 2.1 3.8 1.0 1.5 2.4
Unemployment Rate (%) 3.2 3.5 3.4 3.3 3.4 3.4
Exchange Rate (per USD, end-period) 4.29 4.49 4.05 4.13 4.10 4.00
APPENDIX
Philippines - Key Macroeconomic Indicators

2015 2016 2017 2018 2019E 2020E
Real GDP (%) 6.1 6.9 6.7 6.2 6.5 6.5
Current Account Balance (% of GDP) 2.5 (0.4) (0.7) (2.4) (2.5) (2.4)
Inflation Rate (%, period average) 0.7 1.3 2.9 5.2 3.0 2.8
Unemployment Rate (%, period average) 6.3 5.5 5.7 5.3 5.0 5.0
Benchmark Interest Rate (% p.a., end-period) 4.00 3.00* 3.00 4.75 4.25 4.00
*BSP started used new policy interest rate in Jun 2016.
Singapore - Key Macroeconomic Indicators

2015 2016 2017 2018 2019E 2020E
Real GDP (%) 2.5 2.8 3.9 3.2 1.8 2.1
Gross Fixed Capital Formation (%) 1.5 0.9 5.3 (3.4) 2.6 2.0
Fiscal Balance (% of GDP) (1.0) 1.4 2.3 0.4 (0.7) 1.0
Inflation Rate (%) (0.5) (0.5) 0.6 0.4 1.2 1.0
3M SIBOR (% p.a., end-period) 1.19 0.97 1.50 1.89 2.00 2.00
APPENDIX
Thailand - Key Macroeconomic Indicators

2015 2016 2017 2018 2019E 2020E
Real GDP (%) 3.1 3.4 4.0 4.1 3.6 3.6
Imports of Goods & Services (%) 0.0 (1.0) 6.2 8.6 0.4 3.0
Inflation Rate (%) (0.9) 0.2 0.7 1.1 1.1 1.0
Benchmark
Source: CEIC,Interest
Maybank Rate (% p.a., end-period)
Kim Eng 1.50 1.50 1.50 1.75 1.75 2.00
Vietnam - Key Macroeconomic Indicators

2015 2016 2017 2018 2019E 2020E
Real GDP (%) 6.7 6.2 6.8 7.1 6.8 6.5
Inflation Rate (%) 0.6 2.6 3.5 3.5 3.0 4.1
Exchange Rate (per USD, end-period) 22,485 22,761 22,698 23,175 23,100 23,300
RESEARCH OFFICES
REGIONAL FX LIAW Thong Jung Mohd Hafiz HASSAN
(603) 2297 8688 tjliaw@maybank-ib.com (603) 2082 6819 mohdhafiz.ha@maybank-ib.com
Sadiq CURRIMBHOY Saktiandi SUPAAT • Oil & Gas Services- Regional • Building Materials • Small & Mid Caps
Regional Head of Research & Economics Head of FX Research
(65) 6231 5836 (65) 6320 1379 ONG Chee Ting, CA Amirah AZMI
sadiq@maybank-ke.com.sg saktiandi@maybank.com.sg (603) 2297 8678 ct.ong@maybank-ib.com (603) 2082 8769 amirah.azmi@maybank-ib.com
• Plantations - Regional • Media • Plantations
Christopher WONG
WONG Chew Hann, CA
(65) 6320 1347 Mohshin AZIZ TEE Sze Chiah Head of Retail Research
Regional Head of Institutional Research wongkl@maybank.com.sg (603) 2297 8692 mohshin.aziz@maybank- (603) 2082 6858 szechiah.t@maybank-ib.com
(603) 2297 8686
ib.com
wchewh@maybank-ib.com Leslie TANG Nik Ihsan RAJA ABDULLAH, MSTA, CFTe
• Aviation - Regional • Petrochem
(65) 6320 1378 (603) 2297 8694
ONG Seng Yeow leslietang@maybank.com.sg YIN Shao Yang, CPA nikmohdihsan.ra@maybank-ib.com
Regional Head of Retail Research (603) 2297 8916 samuel.y@maybank-
Fiona LIM ib.com
(65) 6231 5839
(65) 6320 1374 SINGAPORE
ongsengyeow@maybank-ke.com.sg • Gaming – Regional • Media
fionalim@maybank.com.sg Neel SINHA Head of Research
ECONOMICS TAN Chi Wei, CFA (65) 6231 5838 neelsinha@maybank-ke.com.sg
STRATEGY (603) 2297 8690 chiwei.t@maybank-ib.com • Strategy • Industrials
Suhaimi ILIAS • Power • Telcos • SMID Caps – Regional
Sadiq CURRIMBHOY
Chief Economist
Malaysia | Philippines | China Global Strategist WONG Wei Sum, CFA CHUA Su Tye
(603) 2297 8682 (65) 6231 5836 (603) 2297 8679 weisum@maybank-ib.com (65) 6231 5842 chuasutye@maybank-ke.com.sg
suhaimi_ilias@maybank-ib.com sadiq@maybank-ke.com.sg • Property • REITs
Willie CHAN LEE Yen Ling Luis HILADO

CHUA Hak Bin
(603) 2297 8691 lee.yl@maybank-ib.com (65) 6231 5848 luishilado@maybank-ke.com.sg
Regional Thematic Macroeconomist Hong Kong | Regional
• Glove • Ports • Shipping • Healthcare • Telcos • Transport
(65) 6231 5830 (852) 2268 0631
chuahb@maybank-ke.com.sg williechan@kimeng.com.hk LAI Gene Lih, CFA
Ivan YAP
(603) 2297 8612 ivan.yap@maybank- (65) 6231 5832 laigenelih@maybank-ke.com.sg
LEE Ju Ye FIXED INCOME
ib.com • Technology
Singapore | Thailand Winson PHOON, ACA
• Automotive • Semiconductor • Thilan WICKRAMASINGHE
(65) 6231 5844 (65) 6812 8807
Technology (65) 6231 5840 thilanw@maybank-ke.com.sg
leejuye@maybank-ke.com.sg winsonphoon@maybank-ke.com.sg
• Banks
Kevin WONG
Linda LIU Se Tho Mun Yi (603) 2082 6824 kevin.wong@maybank- SZE Jia Min
Singapore | Vietnam (603) 2074 7606 ib.com (65) 6231 5845 jiamin@maybank-ke.com.sg
(65) 6231 5847 munyi.st@maybank-ib.com • REITs • Consumer Discretionary • Consumer
lindaliu@maybank-ke.com.sg
MALAYSIA Adrian WONG, CFA
Dr Zamros DZULKAFLI
WONG Chew Hann, CA Head of Research (603) 2297 8675 adrian.wkj@maybank-
(603) 2082 6818
(603) 2297 8686 wchewh@maybank-ib.com ib.com
zamros.d@maybank-ib.com
• Strategy • Constructions
Ramesh LANKANATHAN
(603) 2297 8685 Desmond CH’NG, ACA Jade TAM
ramesh@maybank-ib.com (603) 2297 8680 (603) 2297 8687 jade.tam@maybank-
desmond.chng@maybank-ib.com ib.com
• Banking & Finance • Consumer Staples
RESEARCH OFFICES
INDIA Romel LIBO-ON Sorrabhol VIRAMETEEKUL TRUONG Quang Binh
(63) 2 849 8844 Head of Digital Research Deputy Head of Retail Research
Jigar SHAH Head of Research romel_libo-on@maybank-atrke.com (66) 2658 5000 ext 1550 (84 28) 44 555 888 x 8087
(91) 22 6623 2632 jigar@maybank-ke.co.in • Property sorrabhol.V@maybank-ke.co.th binh.truong@maybank-kimeng.com.vn
• Strategy • Oil & Gas • Automobile • Cement • Food, Transportation • Rubber Plantation • Tyres & Tubes • Oil & Gas
Kayzer LLANDA
Neerav DALAL (63) 2 849 8839 Wijit ARAYAPISIT TRINH Thi Ngoc Diep
(91) 22 6623 2606 neerav@maybank-ke.co.in Kayzer_llanda@maybank-atrke.com (66) 2658 5000 ext 1450 (84 28) 44 555 888 x 8208
• Software Technology • Telcos • Utilities wijit.a@maybank-ke.co.th diep.trinh@maybank-kimeng.com.vn
Vishal PERIWAL • Strategist • Technology • Utilities • Construction
(91) 22 6623 2605 THAILAND
Kritsapong PATAN NGUYEN Thi Sony Tra Mi
vishalperiwal@maybank-ke.co.in Maria LAPIZ Head of Institutional Research (66) 2658 5000 ext 1310 (84 28) 44 555 888 x 8084
• Infrastructure Dir (66) 2257 0250 | (66) 2658 6300 ext 1399 kritsapong.p@maybank-ke.co.th mi.nguyen@maybank-kimeng.com.vn
Maria.L@maybank-ke.co.th • Chartist • Port Operation • Pharmaceutical
INDONESIA • Strategy • Consumer • Materials • Services
• Food & Beverage
Apisit PATTARASAKOLKIAT
Isnaputra ISKANDAR Head of Research Teerapol Udomvej, CFA (66) 2658 5000 ext 1405 NGUYEN Thanh Lam
(62) 21 8066 8680 (66) 2658 6300 ext 1394 Apisit.p@maybank-ke.co.th (84 28) 44 555 888 x 8086
isnaputra.iskandar@maybank-ke.co.id teerapol.U@maybank-ke.co.th • Chartist thanhlam.nguyen@maybank-kimeng.com.vn
• Strategy • Metals & Mining • Cement • Healthcare
• Technical Analysis
Rahmi MARINA Ekachai TARAPORNTIP Head of Retail Research VIETNAM
(62) 21 8066 8689 (66) 2658 5000 ext 1530
Ekachai.t@maybank-ke.co.th LE Hong Lien, ACCA
rahmi.marina@maybank-ke.co.id
Head of Institutional Research
• Banking & Finance Sutthichai KUMWORACHAI Deputy Head
(84 28) 44 555 888 x 8181
Aurellia SETIABUDI (66) 2658 5000 ext 1400
lien.le@maybank-kimeng.com.vn
(62) 21 8066 8691 sutthichai.k@maybank-ke.co.th
• Strategy • Consumer • Diversified
aurellia.setiabudi@maybank-ke.co.id • Energy • Petrochem
• Property Surachai PRAMUALCHAROENKIT THAI Quang Trung, CFA
(66) 2658 5000 ext 1470 Deputy Head of Institutional Research
Janni ASMAN
Surachai.p@maybank-ke.co.th (84 28) 44 555 888 x 8180
(62) 21 8066 8687
• Auto • Conmat • Contractor • Steel trung.thai@maybank-kimeng.com.vn
janni.asman@maybank-ke.co.id
Suttatip PEERASUB • Real Estate • Construction • Materials
• Cigarette • Healthcare • Retail (66) 2658 5000 ext 1430
suttatip.p@maybank-ke.co.th LE Nguyen Nhat Chuyen
PHILIPPINES • Media • Commerce (84 28) 44 555 888 x 8082
Termporn TANTIVIVAT chuyen.le@maybank-kimeng.com.vn
Minda OLONAN Head of Research
(66) 2658 5000 ext 1520 • Oil & Gas
(63) 2 849 8840
minda_olonan@maybank-atrke.com termporn.t@maybank-ke.co.th QUAN Trong Thanh
• Strategy • Conglomerates • Property (84 28) 44 555 888 x 8184
Katherine TAN Jaroonpan WATTANAWONG thanh.quan@maybank-kimeng.com.vn
(63) 2 849 8843 (66) 2658 5000 ext 1404 • Banks
kat_tan@maybank-atrke.com jaroonpan.w@maybank-ke.co.th
• Banks • Conglomerates • Ports • Transportation • Small cap NGUYEN Thi Ngan Tuyen
Thanatphat SUKSRICHAVALIT Head of Retail Research
Luis HILADO (66) 2658 5000 ext 1401 (84 28) 44 555 888 x 8081
(65) 6231 5848 luishilado@maybank-ke.com.sg thanaphat.s@maybank-ke.co.th tuyen.nguyen@maybank-kimeng.com.vn
• Telcos • Media • Electronics • Food & Beverage • Oil&Gas • Banking
TERMS FOR PROVISION OF REPORT, DISCLAIMERS AND DISCLOSURES
DISCLAIMERS
This research report is prepared for general circulation and for information purposes only and under no circumstances should it be considered or intended as an offer to sell or a solicitation of an
offer to buy the securities referred to herein. Investors should note that values of such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Opinions or
recommendations contained herein are in form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different
methodologies and are purely based on price and volume-related information extracted from the relevant jurisdiction’s stock exchange in the equity analysis. Accordingly, investors’ returns may
be less than the original sum invested. Past performance is not necessarily a guide to future performance. This report is not intended to provide personal investment advice and does not take
into account the specific investment objectives, the financial situation and the particular needs of persons who may receive or read this report. Investors should therefore seek financial, legal
and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report.
The information contained herein has been obtained from sources believed to be reliable but such sources have not been independently verified by Maybank Investment Bank Berhad, its
subsidiary and affiliates (collectively, “MKE”) and consequently no representation is made as to the accuracy or completeness of this report by MKE and it should not be relied upon as such.
Accordingly, MKE and its officers, directors, associates, connected parties and/or employees (collectively, “Representatives”) shall not be liable for any direct, indirect or consequential losses or
damages that may arise from the use or reliance of this report. Any information, opinions or recommendations contained herein are subject to change at any time, without prior notice.
This report may contain forward looking statements which are often but not always identified by the use of words such as “anticipate”, “believe”, “estimate”, “intend”, “plan”, “expect”,
“forecast”, “predict” and “project” and statements that an event or result “may”, “will”, “can”, “should”, “could” or “might” occur or be achieved and other similar expressions. Such forward
looking statements are based on assumptions made and information currently available to us and are subject to certain risks and uncertainties that could cause the actual results to differ
materially from those expressed in any forward looking statements. Readers are cautioned not to place undue relevance on these forward-looking statements. MKE expressly disclaims any
obligation to update or revise any such forward looking statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence of
unanticipated events.
MKE and its officers, directors and employees, including persons involved in the preparation or issuance of this report, may, to the extent permitted by law, from time to time participate or
invest in financing transactions with the issuer(s) of the securities mentioned in this report, perform services for or solicit business from such issuers, and/or have a position or holding, or other
material interest, or effect transactions, in such securities or options thereon, or other investments related thereto. In addition, it may make markets in the securities mentioned in the material
presented in this report. One or more directors, officers and/or employees of MKE may be a director of the issuers of the securities mentioned in this report to the extent permitted by law.
This report is prepared for the use of MKE’s clients and may not be reproduced, altered in any way, transmitted to, copied or distributed to any other party in whole or in part in any form or
manner without the prior express written consent of MKE and MKE and its Representatives accepts no liability whatsoever for the actions of third parties in this respect.
This report is not directed to or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such
distribution, publication, availability or use would be contrary to law or regulation. This report is for distribution only under such circumstances as may be permitted by applicable law. The
securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. Without prejudice to the foregoing, the reader is to note that additional
disclaimers, warnings or qualifications may apply based on geographical location of the person or entity receiving this report.
Malaysia
Opinions or recommendations contained herein are in the form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply
different methodologies and are purely based on price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis.
Singapore
This report has been produced as of the date hereof and the information herein may be subject to change. Maybank Kim Eng Research Pte. Ltd. (“Maybank KERPL”) in Singapore has no obligation
to update such information for any recipient. For distribution in Singapore, recipients of this report are to contact Maybank KERPL in Singapore in respect of any matters arising from, or in
connection with, this report. If the recipient of this report is not an accredited investor, expert investor or institutional investor (as defined under Section 4A of the Singapore Securities and
Futures Act), Maybank KERPL shall be legally liable for the contents of this report, with such liability being limited to the extent (if any) as permitted by law.
Thailand
Except as specifically permitted, no part of this presentation may be reproduced or distributed in any manner without the prior written permission of Maybank Kim Eng Securities (Thailand)
Public Company Limited. Maybank Kim Eng Securities (Thailand) Public Company Limited (“MBKET”) accepts no liability whatsoever for the actions of third parties in this respect.
Due to different characteristics, objectives and strategies of institutional and retail investors, the research reports of MBKET Institutional and Retail Research Department may differ in either
recommendation or target price, or both. MBKET Retail Research is intended for retail investors (http://kelive.maybank-ke.co.th) while Maybank Kim Eng Institutional Research is intended only
for institutional investors based outside Thailand only.
The disclosure of the survey result of the Thai Institute of Directors Association (“IOD”) regarding corporate governance is made pursuant to the policy of the Office of the Securities and
Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the market for Alternative Investment disclosed to the
public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside
information. The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey may be changed after that date. MBKET does not
confirm nor certify the accuracy of such survey result.
The disclosure of the Anti-Corruption Progress Indicators of a listed company on the Stock Exchange of Thailand, which is assessed by Thaipat Institute, is made in order to comply with the
policy and sustainable development plan for the listed companies of the Office of the Securities and Exchange Commission. Thaipat Institute made this assessment based on the information
received from the listed company, as stipulated in the form for the assessment of Anti-corruption which refers to the Annual Registration Statement (Form 56-1), Annual Report (Form 56-2), or
other relevant documents or reports of such listed company. The assessment result is therefore made from the perspective of Thaipat Institute that is a third party. It is not an assessment of
operation and is not based on any inside information. Since this assessment is only the assessment result as of the date appearing in the assessment result, it may be changed after that date or
when there is any change to the relevant information. Nevertheless, MBKET does not confirm, verify, or certify the accuracy and completeness of the assessment result.
US
This third-party research report is distributed in the United States (“US”) to Major US Institutional Investors (as defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended)
only by Maybank Kim Eng Securities USA Inc (“Maybank KESUSA”), a broker-dealer registered in the US (registered under Section 15 of the Securities Exchange Act of 1934, as amended). All
responsibility for the distribution of this report by Maybank KESUSA in the US shall be borne by Maybank KESUSA. This report is not directed at you if MKE is prohibited or restricted by any
legislation or regulation in any jurisdiction from making it available to you. You should satisfy yourself before reading it that Maybank KESUSA is permitted to provide research material
concerning investments to you under relevant legislation and regulations. All U.S. persons receiving and/or accessing this report and wishing to effect transactions in any security mentioned
within must do so with: Maybank Kim Eng Securities USA Inc. 400 Park Avenue, 11th Floor, New York, New York 10022, 1-(212) 688-8886 and not with, the issuer of this report.
UK
This document is being distributed by Maybank Kim Eng Securities (London) Ltd (“Maybank KESL”) which is authorized and regulated, by the Financial Conduct Authority and is for Informational
Purposes only. This document is not intended for distribution to anyone defined as a Retail Client under the Financial Services and Markets Act 2000 within the UK. Any inclusion of a third party
link is for the recipients convenience only, and that the firm does not take any responsibility for its comments or accuracy, and that access to such links is at the individuals own risk. Nothing in
this report should be considered as constituting legal, accounting or tax advice, and that for accurate guidance recipients should consult with their own independent tax advisers.
DISCLOSURES
Legal Entities Disclosures
Malaysia: This report is issued and distributed in Malaysia by Maybank Investment Bank Berhad (15938- H) which is a Participating Organization of Bursa Malaysia Berhad and a holder of Capital
Markets and Services License issued by the Securities Commission in Malaysia. Singapore: This report is distributed in Singapore by Maybank KERPL (Co. Reg No 198700034E) which is regulated by
the Monetary Authority of Singapore. Indonesia: PT Maybank Kim Eng Securities (“PTMKES”) (Reg. No. KEP-251/PM/1992) is a member of the Indonesia Stock Exchange and is regulated by the
Financial Services Authority (Indonesia). Thailand: MBKET (Reg. No.0107545000314) is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities
and Exchange Commission. Philippines: Maybank ATRKES (Reg. No.01-2004-00019) is a member of the Philippines Stock Exchange and is regulated by the Securities and Exchange Commission.
Vietnam: Maybank Kim Eng Securities Limited (License Number: 117/GP-UBCK) is licensed under the State Securities Commission of Vietnam. Hong Kong: KESHK (Central Entity No AAD284) is
regulated by the Securities and Futures Commission. India: Kim Eng Securities India Private Limited (“KESI”) is a participant of the National Stock Exchange of India Limited and the Bombay
Stock Exchange and is regulated by Securities and Exchange Board of India (“SEBI”) (Reg. No. INZ000010538). KESI is also registered with SEBI as Category 1 Merchant Banker (Reg. No. INM
000011708) and as Research Analyst (Reg No: INH000000057) US: Maybank KESUSA is a member of/ and is authorized and regulated by the FINRA – Broker ID 27861. UK: Maybank KESL (Reg No
2377538) is authorized and regulated by the Financial Conduct Authority.
Disclosure of Interest
Malaysia: MKE and its Representatives may from time to time have positions or be materially interested in the securities referred to herein and may further act as market maker or may have
assumed an underwriting commitment or deal with such securities and may also perform or seek to perform investment banking services, advisory and other services for or relating to those
companies.
Singapore: As of 6 May 2019, Maybank KERPL and the covering analyst do not have any interest in any companies recommended in this research report.
Thailand: MBKET may have a business relationship with or may possibly be an issuer of derivative warrants on the securities /companies mentioned in the research report. Therefore, Investors
should exercise their own judgment before making any investment decisions. MBKET, its associates, directors, connected parties and/or employees may from time to time have interests and/or
underwriting commitments in the securities mentioned in this report.
Hong Kong: As of 6 May 2019, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report.
India: As of 6 May 2019, and at the end of the month immediately preceding the date of publication of the research report, KESI, authoring analyst or their associate / relative does not hold any
financial interest or any actual or beneficial ownership in any shares or having any conflict of interest in the subject companies except as otherwise disclosed in the research report.
In the past twelve months KESI and authoring analyst or their associate did not receive any compensation or other benefits from the subject companies or third party in connection with the
research report on any account what so ever except as otherwise disclosed in the research report.
MKE may have, within the last three years, served as manager or co-manager of a public offering of securities for, or currently may make a primary market in issues of, any
or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to
the investment concerned or a related investment and may receive compensation for the services provided from the companies covered in this report.
OTHERS
Analyst Certification of Independence
The views expressed in this research report accurately reflect the analyst’s personal views about any and all of the subject securities or issuers; and no part of the research analyst’s compensation
was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.
Reminder
Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding and assuming the
risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and
exchange rates), time to maturity, market conditions and volatility and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should
conduct its own analysis of the product and consult with its own professional advisers as to the risks involved in making such a purchase.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of MKE.
Definition of Ratings
Maybank Kim Eng Research uses the following rating system
BUY Return is expected to be above 10% in the next 12 months (excluding dividends)
HOLD Return is expected to be between - 10% to +10% in the next 12 months (excluding dividends)
SELL Return is expected to be below -10% in the next 12 months (excluding dividends)
Applicability of Ratings
The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of
the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies.
153

A Sean Tourism

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

A Sean Tourism

Uploaded by

Copyright:

Available Formats

THIS REPORT HAS BEEN PREPARED BY MAYBANK KIM ENG RESEARCH.

68 GROWING AFFLUENCE AND LOW- 118 OTHER INTERESTING

23 EXPANDING TOURISM OFFERINGS

53 AMAZING THAILAND – FUTURE 105 MONETISING TOURISM

THAILAND % of Total Economy in 2017

Highly Reliant More than 7.0%

CAMBODIA USD12.7b Less Reliant 2.0% - 5.0%

ASEAN: QUALITY TOURISM DESTINATION

ASEAN Tourism Strategic Plan, 2016-2025

RICH AND DIVERSE NATURAL Malaysia Singapore Thailand

PRIORITY UNDER ASEAN ECONOMIC COMMUNITY

BECOMING A QUALITY DESTINATION, DIVERSIFYING TO NEW MARKETS

BECOMING A QUALITY DESTINATION, DIVERSIFYING TO NEW MARKETS

BECOMING A QUALITY DESTINATION, DIVERSIFYING TO NEW MARKETS

Philippines 6.7 +3.4 2.1%

ASEAN Attracting ASEAN Tourism Share to Global and Asia Pacific

BECOMING A QUALITY DESTINATION, DIVERSIFYING TO NEW MARKETS

Taiwan 2,696 +6.1

*Indonesia 2,093 +24

Philippines 1,255 +26

Chinese Tourists Visitor Arrivals from China

BECOMING A QUALITY DESTINATION, DIVERSIFYING TO NEW MARKETS

ASEAN Chinese Visitor Arrivals

BECOMING A QUALITY DESTINATION, DIVERSIFYING TO NEW MARKETS

Only 9% of China’s total population have a passport,

BECOMING A QUALITY DESTINATION, DIVERSIFYING TO NEW MARKETS

Source: ASEAN Secretariat

Intra-ASEAN Is the Source Country Person th % of total

South Korea 7,862 6.3%

Japan 5,028 4.0%

Australia 4,343 3.5%

India 4,153 3.3%

Taiwan 2,582 2.1% India is the next big growth market, as

BECOMING A QUALITY DESTINATION, DIVERSIFYING TO NEW MARKETS

Most of ASEAN excluding Singapore are still middle-

Note: Refers to passengers originating from respective country.

BECOMING A QUALITY DESTINATION, DIVERSIFYING TO NEW MARKETS

BECOMING A QUALITY DESTINATION, DIVERSIFYING TO NEW MARKETS

13 -2 Singapore 6.1 6.5 5.5 5.6 6.1 2.4 3.1

26 -1 Malaysia 5.4 5.8 5.2 5.2 5.2 4.1 2.9

34 +1 Thailand 4.7 4.0 4.9 4.9 4.8 4.9 2.8

42 +8 Indonesia 4.5 5.1 4.3 4.6 3.8 4.7 3.3

67 +8 Vietnam 4.4 5.6 5.0 4.9 4.2 4.0 3.0

79 -5 Philippines 4.3 3.6 4.8 4.8 4.0 4.0 1.9 TAKEAWAY

ENHANCING AIRPORT INFRASTRUCTURE, OPENING NEW FRONTIERS

7 0 Australia 5.1 4.8 3.8 4.5 5.7 3.6 6.1

11 +2 Hong Kong 5.8 3.9 4.2 4.3 5.5 6.4 4.4

13 -2 Singapore 6.0 5.2 4.7 4.3 5.3 6.3 5.4

26 -1 Malaysia 4.7 4.1 6.1 3.5 4.5 4.4 4.7

34 +1 Thailand 5.0 3.8 5.6 3.6 4.6 3.1 5.8

42 +8 Indonesia 5.6 4.3 6.0 3.2 3.8 3.2 3.1

67 +8 Vietnam 4.0 3.0 5.3 3.4 2.8 3.1 2.6

79 -5 Philippines 4.8 3.4 5.5 3.6 2.7 2.5 3.4

94 +2 Lao PDR 4.7 3.0 5.7 3.8 2.1 2.4 3.5

ASEAN’s infrastructure readiness scores

ENHANCING AIRPORT INFRASTRUCTURE, OPENING NEW FRONTIERS

Don Mueang Bangkok (Thailand) 40.8 30 136

Ninoy Aquino Manila (Philippines) 45.1 31 145

Tan Son Nhat Ho Chi Minh (Vietnam) 38.0 25 152

*Noi Bai Hanoi (Vietnam) 26.0 25 104

*Refers to preliminary estimate for 2018.

ENHANCING AIRPORT INFRASTRUCTURE, OPENING NEW FRONTIERS

Capacity expansions at other secondary international airports are also expected,