CDL Hospitality Trusts - Maybank Kim Eng 2020-11-01: Easing Not Easy

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

CDL Hospitality Trusts - Easing Not Easy


A weak quarter, false start in Europe



Some good…

  • CDL Hospitality Trusts's occupancy excluding W Hotel rose 2.6ppts y-o-y to 90.2% with extended demand from government agencies for dedicated isolation facilities and from foreign workers impacted by border closures. As such, RevPAR fell 60.9% y-o-y to S$64 from a 61.5% y-o-y decline in ADR.
  • Revenue and NPI for CDL Hospitality Trusts's Singapore hotels fell 39.2% y-o-y and 58.1% y-o-y in 3Q20, in line with our estimates. The W Hotel has seen good traction from staycation demand, and management expects to raise ADR (by 20-25%) from Dec, although we think (near term) upside and occupancies will be capped by safe distancing rules.


And bad, except for Australia, New Zealand

  • CDL Hospitality Trusts's overseas hotels were weaker, and NPIs decreased in:
    1. Japan, with borders closed and its Tokyo hotels initially excluded from the domestic ‘Go To Travel’ tourism campaign,
    2. the UK, which reopened following mandatory closures in 2Q20, and
    3. Germany and Italy, as impairment charges (S$2.4m) against rent receivables continued to be recognised.
  • NPI for its Australian hotels (-3.5% y-o-y) was largely cushioned by a fixed rent structure from its master leases, while it rose 70.5% y-o-y in New Zealand as the government’s managed isolation business was extended.

Balance sheet sound






Chua Su Tye Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2020-11-01
SGX Stock Analyst Report HOLD MAINTAIN HOLD 0.950 SAME 0.950



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