Far East Hospitality Trust - OCBC Investment 2019-06-12: Expecting A Muted 2Q

FAR EAST HOSPITALITY TRUST (SGX:Q5T) | SGinvestors.io FAR EAST HOSPITALITY TRUST (SGX:Q5T)

Far East Hospitality Trust - Expecting A Muted 2Q

  • Negative performance since downgrade.
  • 6.1% FY19F yield as at 11 Jun’s close.
  • Cheaper, but not yet compelling.



Underperformed the FSTREI by 8.8ppt since our 15 Apr downgrade



Latest hospitality figures point to 2Q weakness

  • Singapore Tourism Board’s (STB) Apr numbers reflect decent visitor growth but a generally disappointing RevPAR performance for the first month of the 2Q. Visitor arrivals were up +3.4% y-o-y in Apr, with visitor days up +4.0% y-o-y. Meanwhile, RevPAR for Mid-tier and Upscale hotels posted -1.6% and - 2.1% y-o-y growth in Apr respectively. This is broadly consistent with what was disclosed by CDL HOSPITALITY TRUSTS (SGX:J85) in their last results release: CDL Hospitality Trusts’s SG RevPAR was down 3.5% for the first 25 days of April.
  • In our last report, we did highlight that April would continue to be challenging for Singapore hotels given the absence of biennial event Food&HotelAsia. See report: Far East Hospitality Trust - Challenging First Few Months. In addition, the Trump-Kim summit held in Jun last year was another boon for Far East Hospitality Trust’s hotels that will be absent this year.
  • We continue to see 2H19 as being more promising for RevPARs than 1H19, but continue to keep an eye on the US-China trade tensions and its implications for discretionary spending across the region.


Underperformed STI by 4% since our 15 Apr downgrade






Deborah Ong OCBC Investment Research | https://www.iocbc.com/ 2019-06-12
SGX Stock Analyst Report HOLD MAINTAIN HOLD 0.670 SAME 0.670



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