Asset World Corporation (AWC) would be the main beneficiary of the government plan to legalise casinos as part of entertainment complexes as the company operates luxury hotels and retail centres near potential sites for these developments, says Tisco Securities.
As a first step towards legalisation, the government has been looking to attract high-spending tourists to support the economy, while also checking revenue leaks from illegal gambling.
The government is considering opening the first entertainment-casino complex in Hat Yai to boost tourism, with only foreigners initially allowed to enter the premises.
The research department of Tisco Securities said some of the biggest beneficiaries would be operators of luxury hotels and retail centres near those locations, with a focus on high-end customer markets such as AWC.
AWC has several mixed-use projects planned over the next five years that could be good candidates for building a casino or developing a destination for luxury tourists.
"We chose AWC as a recommended stock. The hotel operator has the potential to increase revenue per room, which is still slowly increasing, and steadily penetrate into the tourism market in Thailand," Tisco said in a research note.
Tisco said AWC's combined assets are strategically located near major airports.
"Any casino would be established near a major airport. According to a preliminary government study, casino-type entertainment venues may be located within 100 kilometres of three major airports -- Suvarnabhumi, Don Mueang, U-tapao -- or within the Eastern Economic Corridor and Southern Economic Corridor," said the brokerage.
AWC has at least three large mixed-use projects fall within these parameters. The company's meetings, incentives, conventions, and exhibitions (Mice) business has been slow to recover in terms of occupancy rates.
With regards to casino licensing plans, Tisco said AWC's construction of large-scale entertainment venues may happen sooner than expected with a shorter break-even point.
The brokerage maintained a "buy" recommendation for AWC with an appropriate price of 5.80 baht per share.