During the H1 earnings call, ASW indicated a pickup in sales thanks to the intake of ASW premium memberships coming from the Emirates Skywards miles program. Having spoken to management at this year’s Eigenkapitalforum, this is what we learned about ASW’s promising partnerships:

• Emirates Skywards partnership is seen to be a major top line driver in 2023e: Frequent flyers that sign up to ASW premium memberships receive 250k - 500k reward miles each year - on top of other benefits. Next to Etihad and Miles & More, Emirates Skywards should now open the door for new and existing ASW members to subscribe to premium membership (Prestige for € 5,200 p.a. and Signature for € 9,900 p.a.). With global passenger numbers already at pre-COVID levels and an expected growth of 16% in 2023e (see p.2), we see further tailwinds for ASW's subscription business, as flight bookings and miles demand are set to recover significantly.
• Roughly 500k members of Global Hotel Alliance's elite tier loyalty program GHA Discovery can receive a complementary ASW basic membership, allowing ASW to cross sell its services and premium subscriptions to high income travelers. So far, about 4k GHA Discovery members joined ASW, showing a sound member intake. In return, ASW adds additional independent hotels that want to offer their guests a loyalty program under the brand “ASW Hotels & Resorts” to the GHA universe, for which ASW receives a service fee from GHA plus booking commissions from each independent hotel.

All in all, we expect ASW's 10% stake in GHA to be highly value accretive: Debt servicing of the CHF 4m bank loan used for the purchase of it should be fully offset by revenues from long-term service fees plus expected dividends from GHA in 2023e. Additional revenues from e.g. “ASMALLWORLD Hotels & Resorts” hotel brokerage commissions are seen to come on top. Further, management considers the introduction of a free basic membership in H1 2023e to increase member intake significantly as well as reduce churn. In our view, cross-selling opportunities from a higher member base are seen to more than compensate any lost proceeds (basic membership currently costs € 79 p.a.)

For FY '23e we expect strong sales growth of 36% yoy and EBITDA growth of 59% yoy thanks to ASW's scalable business supported by a sound recovery of the global luxury travel and hotel market (see p.2).

BUY with unchanged PT of CHF 7.40 based on DCF.