Morning News &Views -Asia:A Summary of Select Global Markets Research

Greens is an operator of 89 hotels (total of 12,195 guest rooms). Roughly 80% of thehotels operated by Greens are in regional Japan and we expect the company to benefitfrom the government’s Tourism Nation policy, which is a pillar of its regionalrevitalization strategy. The growth in total hotel stays by foreigners visiting Japan hasbeen slowing since start-2016, but growth is higher in regional Japan than in the threemain conurbations and the weighting of repeat visitors within foreigners coming toJapan has been tending to rise. Greens now targets growing profits by stepping up itsefforts to open new hotels, having strengthened its financial structure through its recentstock market listing. We expect a profit decline in 18/6 as sales growth is unable tocover the concentration of new hotel opening costs at the fiscal year-end. However, wethen forecast consistent profit growth exceeding 10% from 19/6. We forecast 19/6 EPSof ￥136.7, owing mainly to full-year operation of new hotels opened during 18/6. Wealso see good prospects for further share price appreciation, depending on externalfactors such as business sentiment within Japan and forex levels.