Market Professionals and Securities Experts Urge Investors to Stay Away from Dusit Hotels That is Plagued with Problems

Bangkok Hotel News: Dusit Thani’s Public Drama Spurs Investor Caution

A growing number of market analysts and securities professionals are warning investors to avoid Dusit Thani PLC (DUSIT), a prominent Thai hotel group whose internal corporate drama and weak financial performance have become red flags for the investment community. The company’s troubles came to a head this week when shareholders rejected the reappointment of four board members, exposing ongoing power struggles among Dusit’s top shareholders.

The directors ousted from their roles include Arsa Sarasin, Pranee Phasipol, Pakhawat Kovithvathanaphong, and Somprasong Boonyachai. With their departure, the size of the board shrinks to eight directors, casting uncertainty over the group’s ability to make strategic decisions in a timely and unified manner. This Bangkok Hotel News report highlights that the abrupt leadership shake-up has rattled investor confidence just as Thailand’s tourism sector enters a key rebound period.

Internal Conflicts and Governance Concerns

Dusit’s issues extend beyond simple boardroom reshuffling. The failed re-election is being seen as part of a deeper conflict with Chanut and Children Co., the founding family’s holding company which owns nearly 50% of Dusit’s shares. This familial control, now marked by infighting, has sparked growing alarm among institutional investors and independent analysts alike. The tension raises doubts about the company’s governance stability, project pipeline, and future growth strategy.

Adding to investor unease, Dusit failed to get approval from over three-quarters of shareholders for its 2024 financial statement at the previous meeting—a rare occurrence that underscores the depth of internal mistrust. While the company claims the issue will be resolved in a future meeting, no timeline has been set, leaving a cloud of uncertainty hanging over the group’s financial disclosures.

Stock Falters Despite Market Rally       

Dusit’s stock fell as much as 2.7% lastThursday morning, closing at 7.20 baht, even as the SET index surged more than 1% in reaction to positive U.S. trade developments. The drop reflects the market’s reaction to Dusit’s governance woes, which appear to be weighing more heavily on investor sentiment than broader economic optimism.

Mantanee Surakarnkul, the company secretary, sought to calm nerves by stating that operations would not be impacted and the group would remain in compliance with corporate governance regulations. She also noted that the board’s nomination committee is actively seeking new director candidates to fill the vacant seats. However, analysts warn that if these proposed directors are also rejected in upcoming meetings, the company could enter a cycle of stagnation, crippling its ability to move forward with key hospitality developments and international expansions.

A History of Losses and Uncertain Recovery

Despite a modest net profit of 48 million baht in the first quarter of this year, Dusit’s performance has been inconsistent and mostly bleak over the past five years. The company racked up net losses of 1.01 billion baht in 2019, 945 million in 2020, 501 million in 2021, and 570 million in 2022. Even with the rebound in tourism last year, Dusit still ended 2023 with a loss of 237 million baht.

While the first-quarter 2024 profit may seem like a turning point, it represents a 60% drop year-on-year and an 84.6% decline compared to the previous quarter—figures that hardly inspire confidence.

A Company in Turmoil, a Cautionary Tale for Investors

With ongoing disputes among key stakeholders, rejection of financial disclosures, falling profits, and boardroom instability, Dusit Thani is rapidly shifting from a legacy brand in Thai hospitality to a company plagued by risk and uncertainty. Market experts caution that unless the group can stabilize its leadership and regain shareholder trust, its ability to capitalize on the tourism recovery may be permanently compromised.

For now, Dusit Thani appears to be a high-risk stock with no clear roadmap. Investors, both local and foreign, would be wise to keep their distance until transparency is restored and governance issues are resolved. Until then, market watchers are likely to continue sounding the alarm over a company that once stood proudly at the heart of Thailand’s hospitality landscape.

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