Uni-Asia Group's hotel business in Japan is on an upward trajectory ahead of a tourism boom in 2020, thanks to the Olympic Games in Japan.

The government is targeting tourist arrivals to hit 40 million in 2020 compared to the 31 million achieved in 2018. 

HotelAkasakaPart of lobby of Hotel Vista Premio Tokyo Akasaka: Where the Singapore group stayed. Photo: Hotels.comAnd the official target for 2030 is 60 million.

Uni-Asia's expanding hotel business is positioned to ride the boom.

Five years ago (ie, as at end-June 2014), Uni-Asia operated 9 hotels with a total of 1,379 rooms.

As at end of June 2019, Uni-Asia operated 15 hotels with 2,525 rooms.

Though still not profitable in 1H2019 (loss of US$1.45 million), this segment is expected to soon reach an inflection point, thanks to economies of scale and higher revenue.


Last week, several Singapore analysts and NextInsight flew to Japan to get a good feel of Uni-Asia's businesses there. 

We will publish excerpts of analyst reports in the days ahead when they are released into the public domain. Meanwhile ....
 
watchnowOur 3-minute video of the trip:

 

The main spike in Uni-Asia's hotel portfolio happened in 2018: Five new hotels it had earlier contracted to manage were completed and opened that year. 

By 2020, five more hotels will be operated by Uni-Asia.

Then the total number of rooms it operates would jump to 3,400, an approximately 150% surge in 5 years.


• ALERO residential projects
Aside from operating hotels in various cities for their owners, Uni-Asia also develops for sale small residential property projects in Tokyo. 

Stock price 

73 c

52-week range

68 – 88 c

Market cap

S$58 m

Core PE (FY19F)*

5.6 x

Dividend yield (FY19F)

5.5%

Price-to-book*

0.3

Year-to-date 
return

-13%

* Source: KGI Securities

For the full year 2013, Uni-Asia started 6 new projects and completed 3.

In 2018, it was 6 new projects and 7 completed ones.

On average, Uni-Asia completes 7 to 8 projects a year, consistently generating more than 20% IRR.

Such projects take less than 2 years from start of investment to completion of sale. 


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