OUE Hospitality Trust - OCBC Investment 2017-06-09: Changi Airport Set To Handle 60m Passengers This Year

OUE HOSPITALITY TRUST SK7.SI

OUE Hospitality Trust - Changi Airport Set To Handle 60m Passengers This Year

According to Changi Airport Group (CAG) traffic numbers, passenger movements were up +7.8% in Apr, +4.3%YoY in Mar, +1.5% in Feb, and +8.2% YoY in Jan this year. At the end of May, CAG announced that more than 1b passengers have passed through the airport, and that it is set to handle a record 60m passengers this year.

CAG also recently revealed that it has awarded all concession contracts for retail, F&B and service outlets at its new Terminal 4, which is expected to open in 2H17.
Given its direct link to Terminal 3, we see OUE Hospitality Trust’s (OUEHT) enlarged Crowne Plaza Changi Airport (CPCA) as being well-positioned to benefit from Changi Airport’s expansion plans and successes.
In the upcoming year, we expect CPCA to benefit from the greater passenger traffic as well as the opening of Terminal 4. Down the line, the scheduled opening of Jewel Changi Airport in early 2019 is expected to further increase the attractiveness of staying at the asset.
We still see upside at current prices and re-iterate BUY on OUEHT with a fair value of S$0.75.

Deborah Ong OCBC Investment | http://www.ocbcresearch.com/ 2017-06-09

OCBC Investment SGX Stock Analyst Report BUY Maintain BUY 0.750 Same 0.750