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Investing.com - UBS downgraded Asset World Corp PCL (BK:AWC) from Neutral to Sell, while lowering its price target to THB1.90 from THB2.10, citing pressure from a soft Bangkok RevPAR (revenue per available room) outlook.
The investment bank expects Asset World’s five-year expansion plan to weigh on EPS growth from 2025 to 2027, while rising interest expenses continue to erode profitability. UBS cut its 2026-27 EPS estimates by 19-34% to reflect higher planned capital expenditures, increased pre-opening expenses for new hotels, and negative EBITDA during the initial ramp-up phase.
UBS noted that Asset World stock is trading at 32 times 2026 estimated PE, compared to peers’ 15-20 times, suggesting the shares are overvalued relative to the sector.
The stock has rallied from its June 2025 low alongside other companies with heavy balance sheets, as the market prices in a lower interest rate outlook in Thailand. Despite this more favorable macro backdrop, UBS expressed concerns about Asset World’s tight balance sheet and expansion plans.
UBS forecasts Asset World’s net debt to EBITDA ratio will remain high at 12.5 times in 2026 before easing to 9.5 times by 2029, assuming smooth execution of new hotel openings. On a net debt-to-equity basis, the firm sees risk as more contained, with interest-bearing debt to equity of 0.8 times, supported by revaluation gains on freehold assets.
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