CDL Hospitality Trusts - OCBC Investment 2020-02-03: Outbreak Of Coronavirus Could Weigh On Travel Demand

CDL HOSPITALITY TRUSTS (SGX:J85) | SGinvestors.io CDL HOSPITALITY TRUSTS (SGX:J85)

CDL Hospitality Trusts - Outbreak Of Coronavirus Could Weigh On Travel Demand

  • CDL Hospitality Trusts' 4QFY19 results in-line.
  • Strong performance from SG hotels.
  • Expecting near-term volatility.



4QFY19 DPU flat; full year DPU was down 2.6% y-o-y

  • CDL HOSPITALITY TRUSTS (SGX:J85)'s 4Q19 results were within expectations. 4Q19 NPI dropped 1.2% y-o-y to S$38.0m, pulled down by lower contributions from CDL Hospitality Trusts’ overseas market which more than offset the strong performance from Singapore hotels.
  • CDL Hospitality Trusts' 4Q19 DPU was flat y-o-y at 2.77 S cents. On a full-year basis, FY19 DPU decreased by 2.6% y-o-y to 9.02 S cents, due to lower NPI (-3.3% y-o-y) and higher interest expenses.


SG RevPAR up 4.3% in 4Q19

  • In terms of operating metrics, CDL Hospitality Trusts’ Singapore RevPAR increased by 5.1% y-o-y in 4Q19, the strongest quarterly y-o-y RevPAR growth since 2012, driven by a 3.3% growth in ADR and 1.4ppt increase in occupancy.
  • CDL Hospitality Trusts’ overseas market performances, however, were weak, with NPI falling between 3-31.2% y-o-y, with the exception of UK which saw a growth of 0.3%. The weak performances were mainly due to currency weakness (i.e. Australia, New Zealand), softer demand (i.e Japan, UK, Germany) and also supply pressures (Japan, New Zealand, Maldives, UK) which are likely to continue to FY20.


Lower Fair Value estimate of S$1.62






Chu Peng OCBC Investment Research | https://www.iocbc.com/ 2020-02-03
SGX Stock Analyst Report HOLD DOWNGRADE BUY 1.62 DOWN 1.690



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