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ERW: Long-Term Asoke Land Lease Will Support Margin Expansion

Urbanization And Tech Will Fuel Travel Though Risk Will Mount

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ERW
AnalystHighTarget
Not Invested
Published 14 Jul 2025

Update shared on 12 Dec 2025

Fair value Increased 1.70%
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AnalystHighTarget's Fair Value
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1Y
-41.3%
7D
-1.7%

Analysts have nudged their price target on Erawan Group slightly higher to reflect a modest increase in fair value, supported by expectations of stronger profit margins and a marginally lower discount rate, despite tempering revenue growth and future P/E assumptions.

What's in the News

  • The board approved entry into a long-term land lease agreement with Akkara Sarapa Company Limited for a 20-41.8 rai plot near BTS Asoke Station in Bangkok, positioning the group for a new hospitality or mixed-use project in a prime transit location (Board Meeting filing).
  • The long-duration land lease structure is expected to provide cost visibility and flexibility for project planning, potentially supporting higher and more stable returns from the new Bangkok asset over time (Board Meeting filing).
  • Strategic expansion in the Asoke area underscores management’s focus on strengthening its presence in high-traffic central Bangkok districts, aligning with medium-term growth and asset enhancement plans (Board Meeting filing).

Valuation Changes

  • Fair Value was nudged higher from THB 4.63 to THB 4.71 per share, reflecting a modest uplift in intrinsic valuation.
  • The Discount Rate edged down slightly from 14.34 percent to 14.33 percent, implying a marginally lower perceived risk profile.
  • Revenue Growth was revised down from 9.12 percent to 7.96 percent, indicating more conservative top line expectations.
  • The Net Profit Margin increased from 10.48 percent to 11.59 percent, signaling an improved outlook for operating efficiency and earnings quality.
  • Future P/E was trimmed from 31.21x to 29.87x, pointing to a slightly less aggressive valuation multiple on forward earnings.

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