Forum Archive Index - April 2000

["vincent.wang" <vincent.wang@xtra.co.nz>]

Yes, I have seen a lot of THL's campervans, both Mui and Britz, in Rotoroa last week too. On my last trip to the South Island in late last December, a low season due to the Y2K problem and Christmas, I also saw a lot of THL's campervans all the way from Christchurch, Dunedin, Queenstown, to Te Anau and Milfordsound.

 

THL is definite a strong growth company.  And I could not find many NZSE listed companies have similar strong growth pattern like THL. 

 

THL has a sales of 19,397k in 1989 and its sales has reached to 169,060k in1999, a compound growth rate about 25%.  Its net profit in 1989 is 1,987k and in 1999, its net profit has grown up to 6,705k, a compound growth rate of 13%.

 

And the growth story has just started.  With the purchase of Britz last year, its half year sales up to 31/12/99 has further grown up to 97,124k.(half year net profit jumped to 7,579k)  And this figure only includes 2 months operation of Britz.

 

I can see there are still a lot of upsides for THL:

 

--  the upcoming Olympic will bring more tourists to Australia and N.Z.  (Australia's operation will account 50% of THL's total sales in year 2000)

 

--  the weak Aussie and Kiwi dollars are good for tourism industry.  And I can't see how could Kiwi dollar become much stronger(against Greenback or Yen) in a few years time because we have serious current account deficits problem, $8.1 billion last year.

 

--  the strong recovery of Asian countries(from financial crisis) and Japan would bring more tourists in. ( We have seen significant drop of tourist numbers from Asian countries from late 97 to 99.)

 

-- the synergy generated from the merge of Mui and Britz.

 

-- cheap hotel/motel tarrif, due to oversupply, will attract more tourists.(Queenstown's rooms numbers has nearly doubled in past year since Clinton's visit)

 

-- basically, NZ 's tourism industry is still in a very early developing stage, particularly in South Island.  In my point of view, Te Anau and  Milfordsound are just looked like a virgin land for tourism industry.( try to compare Te Anau and Milfordsound with US's Yosemite, you'll know what I mean)

 

I believe THL has capability to achieve an EPS of 27cents to 29cents in year 2000.  This would enabel THL to distribute 14 - 15 cents dividends.  ( I guess the low dividends, 9 cents per share in year 99, might be a reason why investors are not so interested in this stock) 

 

I strongly recommend THL as both a short term and long term investment stock.

 

Regards,

 

Vincent Wang

 

Disclosure: hold THL and intend to hold for many years