GuocoLeisure (GLL): CIMB hosted GLL during NDR yesterday (18 June) and Group CEO, Mike DeNoma, provided an update on group’s recent developments.
GLH (the hotel arm of GLL) is attacking the conventional hotel investment and management business with its new VCGM model which emphasises on decentralization. This model allows better employment of data science for yield control and guest experience enhancement.
Currently GLH is still focusing on hotel refurbishment and efficiency enhancement and they would be ready to reach out for management contracts by June 2016. Management sees the 15 London hotels as trophy assets and would leverage its proven track record on these assets for future contract wins.
Lastly, GLL would continue to explore options for its non-core assets (mainly the Clermont casino and property in Molokai). Management sees no imperative for disposing the assets at a discounted price, given their passive investment nature and GLL’s well covered capital needs.
Key re-rating catalysts include organic earnings growth in the core hotel business, new management contract wins and potential monetisation of its non-core assets.
The house reiterated their ADD rating with an unchanged TP: $1.18. GLL is trading at a discount of 37% to RNAV of $1.57.
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