When Mandarin Oriental announced that it was carrying out a strategic review for its The Excelsior hotel in Hong Kong, its share price promptly shot up from USD1.27 at the beginning of the year to USD2.81 at its peak in Sep. There was talk that the sale of The Excelsior would have added nearly USD3 to its share price. Mandarin owns a total of 17 hotels through subsidiaries, associates and joint ventures. Imagine how valuable the entire group would be if all its hotels could be valued at similar valuations.

I did not pursue Mandarin, since its share price had already shot up. However, when City Developments announced that it was privatising its hotel subsidiary, Millennium & Copthorne (M&C), I decided to take a closer look at the hotel groups listed on SGX. There could be something valuable about hotels that insiders know but the market does not ...