瑞信-亚太地区-股票策略-新加坡市场策略：游客热情降温-2019.6.7-25页.pdf

DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES,ANALYST CERTIFICATIONS,LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS.US Disclosure:Credit Suisse does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.7 June 2019 Asia Pacific/Singapore Equity Research Strategy Singapore Market Strategy?Research Analysts Gerald Wong,CFA 65 6212 3037 gerald.wongcredit- Louis Chua,CFA 65 6212 5721 louis.chuacredit- Danny Chan 60 3 2723 2082 danny.chancredit- STRATEGY Tourist passion is cooling Figure 1:We expect tourist arrivals to fall to 18.3 mn in 2019,below Singapore Tourism Board expectations of 18.7-19.2 mn Source:STB,CEIC,Credit Suisse estimates Lowering tourist arrival growth assumption.We forecast tourist arrivals in Singapore to fall by 1%YoY to 18.3 mn in 2019,below Singapore Tourism Boards projection of 1-4%increase.This is led by a slowdown in arrivals from China,Indonesia and Malaysia,impacted by poor consumer sentiment and currency weakness relative to the Singapore dollar.In addition,loss of market share of Chinese tourists to countries such as Vietnam and Japan presents further downside risks.Tourist spending could be even weaker.We expect tourist spending to decline even sharper as higher number of daytrippers and multi-destination visitors results in short length of stay.Despite a 6%YoY growth in tourist arrivals in 2018,expenditure on shopping/accommodation fell 13%YoY/6%YoY,as average length of stay fell further to 3.3 days.Recent plans to boost investments by integrated resorts and to rejuvenate Orchard Road are unlikely to reverse the near-term weakness,in our view.Cautious on tourism-related stocks.We downgrade SATS to UNDERPERFORM(from Neutral)as we believe it will be directly impacted by the decline in tourist arrival volumes.We also downgrade CDL HT to NEUTRAL as RevPAR is likely to disappoint despite a moderation in supply growth.Our TP for Genting Singapore is reduced to S$0.90(from S$0.95)due to lower mass and non-gaming revenue.-20.0-15.0-10.0-5.00.05.010.015.020.025.011.012.013.014.015.016.017.018.019.020.02010201120122013201420152016201720182019EVisitor arrivals(mn)CS 2019EVisitor arrivals,YoY(%)-RHSCS estimate of 18.3mn below STB forecast of 18.7-19.2mn 7 June 2019 Singapore Market Strategy 2 Focus charts and table Figure 2:Slowdown driven by weakness across Chinese,Malaysian and Indonesian tourist arrivals Figure 3:Singapore has lost market share amongst Chinese outbound travelers Source:STB,CEIC Source:CEIC Figure 4:Indonesian tourists arrivals fell 3.0%YoY in 1Q19 as IDR remained weak relative to SGD Figure 5:Average length of stay has also declined to 3.3 days in 2018 from 3.7 days in 2014 Source:STB,CEIC Source:STB,CEIC Figure 6:Cautious on tourism-related stocks Price Target Market Yield P/B ROE NDE (S$)price cap P/E(x)(%)(x)(%)(%)Company RIC Rating 4 Jun (S$)(US$mn)FY18A FY19E FY20E FY19E FY19E FY19E FY19E SATS SATS.SI U 5.04 4.40 4,148 24.1 23.4 23.9 3.8 3.4 14.7 Net Cash SIA SIAL.SI N 9.06 10.30 7,959 15.2 12.8 12.1 3.3 0.8 6.1 27.1 CDL Hospitality Trusts CDLT.SI N 1.61 1.47 1,427 24.7 18.5 18.0 5.6 1.0 5.6 46.1 Genting Singapore GENS.SI N 0.86 0.90 7,612 13.7 13.7 13.4 4.0 1.3 9.5 Net Cash Source:Credit Suisse estimates 5.8%2.3%13.4%7.3%2.3%4.6%5.7%13.7%-0.3%11.3%3.0%-3.0%1.5%0.4%-0.9%2.3%4.9%8.8%2.4%-1.4%-5%0%5%10%15%ChinaIndonesiaIndiaMalaysiaAustraliaJapanPhilippinesUSASouth KoreaVietnam2018(YoY,%)1Q19(YoY,%)17%25%25%66%3%55%32%17%6%-3%20%13%13%30%14%6%24%8%15%-1%14%15%-10%0%10%20%30%40%50%60%70%Total outboundEx.HK/MacauPhilippinesJapanSingaporeVietnamThailandKoreaTaiwanMacauHK1Q19,YoY(%)2018,YoY(%)-20.0%-10.0%0.0%10.0%20.0%30.0%40.0%50,000100,000150,000200,000250,000300,000350,000Jan-10Jun-10Nov-10Apr-11Sep-11Feb-12Jul-12Dec-12May-13Oct-13Mar-14Aug-14Jan-15Jun-15Nov-15Apr-16Sep-16Feb-17Jul-17Dec-17May-18Oct-18Mar-19Visitor Arrivals:IndonesiaYoY Change(3MMA)%-RHS4.04.03.93.73.63.53.73.63.43.43.33.03.13.23.33.43.53.63.73.83.94.04.14.2 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Average Length of Stay 7 June 2019 Singapore Market Strategy 3 Tourist passion is cooling Tourist arrivals could decline in 2019 Following three years of solid visitor arrival growth in 2016-18 of 6-8%,we expect arrivals to fall 1%YoY in 2019,marking the first year of decline since 2014.Tourist arrival growth has slowed to just 1.0%YoY in 1Q19 from 6.2%YoY growth in 2018,driven largely by a slowdown in growth of Chinese and Malaysian tourist arrivals,as well as a decline in Indonesian tourist arrivals.We expect Chinese tourist arrivals to remain weak with an escalation in the US-China trade tensions and weakness in the Chinese yuan.Chinese tourist arrival growth has moderated to just 3.0%YoY in 1Q19,vs 5.8%in 2018.In addition to weak macro,Singapore has also lost market share relative to other destinations.Total outbound visitors from China was up 17%YoY in 1Q19,picking up from 13%YoY in 2018.Excluding HK/Macau,outbound visitors were up by a sharper 25%YoY in 1Q19,compared to just 13%in 2018.The weakness in tourist arrival numbers is also reflected in indicators across the board,including Changi Airport passenger volumes and STB hotel RevPAR data.Tourist spending could be even weaker According to STB,total tourist receipts grew 0.5%YoY in 2018 to S$26.9 bn,despite health visitor arrival growth of 6.2%.Interestingly,visitor spending was mixed across different segments,with growth in visitor spending on sightseeing,entertainment and gaming,and other components.On the other hand,there was a decline seen in shopping,accommodation and F&B expenditure,as higher number of daytrippers and multi-destination visitors results in short length of stay.Total visitor spending on shopping was down 13%YoY to S$5.38 bn,while spending on accommodation declined 6%YoY to S$5.67 bn.STB expects tourism receipts to increase 1-3%in 2019,which we believe is challenging given the uncertain global economic outlook.We expect recent initiatives such as investments by integrated resorts and plans to rejuvenate Orchard Road to take time to bear fruit.Cautious on tourism-related stocks Given the potential weakness in tourist arrivals and tourism spending,we turn more cautious on tourism-related stocks in Singapore.We downgrade SATS to UNDERPERFORM(from Neutral)as we believe it will be most directly impacted by the decline in tourist arrival volumes.We also downgrade CDL HT to NEUTRAL as RevPAR is likely to disappoint despite a moderation in supply growth.Our TP for Genting Singapore is reduced to S$0.90(from S$0.95)due to lower mass and non-gaming revenue.We maintain NEUTRAL on SIA(TP S$10.30)as we expect operational performance to remain challenged with volume weakness and lack of near-term visibility of its transformation plan.7 June 2019 Singapore Market Strategy 4 Tourist arrivals could decline in 2019 Following three years of solid visitor arrival growth in 2016-18 of 6-8%,we expect arrivals to fall by 1%YoY in 2019,marking the first year of decline since 2014.Tourist arrivals declined by 1.3%YoY in March 2019,driven largely by a slowdown in growth of Chinese and Malaysian tourist arrivals,as well as a decline in Indonesian tourist arrivals.As a result,tourist arrival growth has slowed to just 1.0%YoY in 1Q19 from 6.2%YoY growth in 2018.Figure 7:Annual visitor arrivals(20102019E)Figure 8:Slowdown driven by weakness across Chinese,Malaysian and Indonesian tourist arrivals Source:STB,CEIC,Credit Suisse estimates Source:CEIC Chinese tourist arrivals have been weak Chinese tourist arrivals have been weak since 4Q18 with an escalation in the US-China trade tensions and weakness in the Chinese yuan.Chinese tourist arrival growth has moderated to just 3.0%YoY in 1Q19,vs 5.8%in 2018.Chinese visitors accounted for around 18.5%of total visitor arrivals to Singapore in 2017 and 2018,making up the largest number of visitor arrivals from a single nationality group.Figure 9:Chinese tourist arrival growth has moderated to just 3.0%YoY in 1Q19 Figure 10:China tourists represent about 18.5%of total tourist arrivals into Singapore in 2018 Source:STB,CEIC Source:STB,CEIC In addition to weak macro,Singapore has also lost market share relative to other destinations.Total outbound visitors from China was up 17%YoY in 1Q19,picking up-5.00.05.010.015.020.025.030.035.040.011.012.013.014.015.016.017.018.019.020.02010201120122013201420152016201720182019EVisitor arrivals(mn)CS 2019EVisitor arrivals,YoY(%)-RHSCS estimate of 18.3mn below STB forecast of 18.7-19.2mn 5.8%2.3%13.4%7.3%2.3%4.6%5.7%13.7%-0.3%11.3%3.0%-3.0%1.5%0.4%-0.9%2.3%4.9%8.8%2.4%-1.4%-5%0%5%10%15%ChinaIndonesiaIndiaMalaysiaAustraliaJapanPhilippinesUSASouth KoreaVietnam2018(YoY,%)1Q19(YoY,%)-70.0%-50.0%-30.0%-10.0%10.0%30.0%50.0%70.0%90.0%050,000100,000150,000200,000250,000300,000350,000400,000Jan-10Jun-10Nov-10Apr-11Sep-11Feb-12Jul-12Dec-12May-13Oct-13Mar-14Aug-14Jan-15Jun-15Nov-15Apr-16Sep-16Feb-17Jul-17Dec-17May-18Oct-18Mar-19Visitor Arrivals:ChinaYoY Change(3MMA)%-RHSChina18%Indonesia16%India8%Malaysia7%Australia6%Japan5%Philippines4%USA4%South Korea3%Vietnam3%Others26%7 June 2019 Singapore Market Strategy 5 from 13%YoY in 2018.Excluding HK/Macau,outbound visitors were up by a sharper 25%YoY in 1Q19,compared to just 13%in 2018.The countries that saw the most significant growth was Japan,where arrivals were up 66%in 1Q19(vs 14%in 2018),Vietnam where arrivals were up 55%in 1Q19(vs 24%in 2018),and Thailand where arrivals were up 32%YoY in 1Q19(vs 8%in 2018).As shown in Figure 12,Singapores share of Chinese tourists moderated slightly between 2017 and 2018.Figure 11:Chinese outbound visitors recovered slightly in 1Q19 Figure 12:Singapore market share of Chinese tourist arrivals fell slightly in 2018 Source:CEIC Market share excluding HK/Macau.Source:CEIC The weakness in Chinese tourist arrivals is also seen in Thailand.After a strong recovery in January,AOTs international passenger trend has softened considerably,due mainly to very weak Chinese tourist arrivals.As a result,Credit Suisses analyst has also cut his tourist arrival growth assumption in 2019 from 10%to 7%.The new forecasts imply 2%lower number of international tourists over FY19-20 compared to previous estimates.Figure 13:International tourist arrivals growth Figure 14:Chinese arrivals growth Source:Ministry of Tourism and Sports(MOTS),Credit Suisse Source:Ministry of Tourism and Sports(MOTS),Credit Suisse 17%25%25%66%3%55%32%17%6%-3%20%13%13%30%14%6%24%8%15%-1%14%15%-10%0%10%20%30%40%50%60%70%Total outboundEx.HK/MacauPhilippinesJapanSingaporeVietnamThailandKoreaTaiwanMacauHK1Q19,YoY(%)2018,YoY(%)0%1%2%3%4%5%6%7%2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018JapanKoreaThailandSingaporeMalaysia-4048121620Jan-18Mar-18May-18Jul-18Sep-18Nov-18Jan-19(YoY%)TotalTotal ex CN-25-15-551525354555Jan-18Feb-18Mar-18Apr-18May-18Jun-18Jul-18Aug-18Sep-18Oct-18Nov-18Dec-18Jan-19Feb-19(YoY%)7 June 2019 Singapore Market Strategy 6 Indonesian and Malaysian tourists weak,given unfavourable currency Indonesian tourist arrivals fell 3.0%YoY in 1Q19,vs growth of 2.3%in 2018.Likewise,Malaysian tourist arrival growth has moderated to just 0.4%in 1Q19,vs 7.3%YoY growth in 2018.We believe this is likely driven by continued weakness in their currencies relative to the Singapore dollar.The Indonesian rupiah has weakened to 10,435 in 1Q19,vs an average of 10,551 in 2018,while the Malaysian ringgit has weakened to 3.02 in 1Q19,vs an average of 2.99 in 2018.Figure 15:Indonesian tourists arrivals fell 3.0%YoY in 1Q19 Figure 16:Malaysian tourist arrivals growth moderated to just 0.4%YoY in 1Q19 Source:STB,CEIC Source:STB,CEIC Figure 17:Indonesian rupiah remained weak relative to Singapore dollar Figure 18:Malaysian rinngit remained weak relative to Singapore dollar Source:The BLOOMBERG PROFESSIONALTM service Source:The BLOOMBERG PROFESSIONALTM service Changi airport passenger volumes have also weakened In line with the slowdown in tourist arrivals,Singapores Changi Airport saw a moderation in growth in passenger traffic to just 4.0%in 1Q19,vs growth of 5.5%in 2018.Passenger traffic averaged 5.47 mn in 1Q19,vs average of 5.26 mn in 1Q18.-20.0%-10.0%0.0%10.0%20.0%30.0%40.0%50,000100,000150,000200,000250,000300,000350,000Jan-10Jun-10Nov-10Apr-11Sep-11Feb-12Jul-12Dec-12May-13Oct-13Mar-14Aug-14Jan-15Jun-15Nov-15Apr-16Sep-16Feb-17Jul-17Dec-17May-18Oct-18Mar-19Visitor Arrivals:IndonesiaYoY Change(3MMA)%-RHS-10.0%0.0%10.0%20.0%30.0%40.0%50.0%60.0%20,00040,00060,00080,000100,000120,000140,000160,000Jan-10Jun-10Nov-10Apr-11Sep-11Feb-12Jul-12Dec-12May-13Oct-13Mar-14Aug-14Jan-15Jun-15Nov-15Apr-16Sep-16Feb-17Jul-17Dec-17May-18Oct-18Mar-19Visitor Arrivals:MalaysiaYoY Change(3MMA)%-RHS6,0006,5007,0007,5008,0008,5009,0009,50010,00010,50011,00011,500Jan-10Jul-10Jan-11Jul-11Jan-12Jul-12Jan-13Jul-13Jan-14Jul-14Jan-15Jul-15Jan-16Jul-16Jan-17Jul-17Jan-18Jul-18Jan-19SGDIDR Curncy2.202.302.402.502.602.702.802.903.003.103.20Jan-10Jul-10Jan-11Jul-11Jan-12Jul-12Jan-13Jul-13Jan-14Jul-14Jan-15Jul-15Jan-16Jul-16Jan-17Jul-17Jan-18Jul-18Jan-19SGDMYR Curncy 7 June 2019 Singapore Market Strategy 7 Figure 19:Changi Airport passenger volume growth moderated to just 4.0%in 1Q19 Source:Changi Airport Group,CEIC -4%0%4%8%12%16%20%24%3.03.54.04.55.05.56.06.5Jan-10Apr-10Jul-10Oct-10Jan-11Apr-11Jul-11Oct-11Jan-12Apr-12Jul-12Oct-12Jan-13Apr-13Jul-13Oct-13Jan-14Apr-14Jul-14Oct-14Jan-15Apr-15Jul-15Oct-15Jan-16Apr-16Jul-16Oct-16Jan-17Apr-17Jul-17Oct-17Jan-18Apr-18Jul-18Oct-18Jan-19Changi Airport:Passenger Movements(mn)3MMA YoY(%)-RHS 7 June 2019 Singapore Market Strategy 8 Tourist spending could be even weaker According to STB,total tourist receipts grew 0.5%YoY in 2018 to S$26.9 bn,despite healthy visitor arrival growth of 6.2%.Interestingly,visitor spending was mixed across different segments,with growth in visitor spending on sightseeing,entertainment and gaming,and other components.STB expects tourism receipts to increase 1-3%in 2019,which we believe is challenging given the uncertain global economic outlook.Figure 20:Tourist receipts annual Figure 21:Tourist receipts shopping Source:STB,CEIC Source:STB,CEIC In 2018,there was a decline seen in shopping,accommodation and F&B expenditure,as higher numbers of daytrippers and multi-destination visitors results in short length of stay.Total visitor spending on shopping was down 13%YoY to S$5.38 bn,while spending on accommodation declined by 6%YoY to S$5.67 bn.Figure 22:Average length of stay fell to 3.4 days in 2017 from 3.7 days in 2014 Source:STB,CEIC -30%-20%-10%0%10%20%30%40%50%0.04.08.012.016.020.024.028.032.0199119931995199719992001200320052007200920112013201520172019ETourism receipts(S$bn)Tourism receipts(YoY,%)-RHS-30%-20%-10%0%10%20%30%40%50%60%0.01.0