CDL Hospitality Trusts - OCBC Investment 2021-05-03: Weak 1Q But Recovery Ahead

SGinvestors.io

CDL HOSPITALITY TRUSTS (SGX:J85)

CDL Hospitality Trusts - Weak 1Q But Recovery Ahead

• Singapore RevPAR fell 34.3% y-o-y (including W Hotel).
• Occupancy continued to be supported by isolation business.
• Maldives was the bright spot.

CDL Hospitality Trusts's 1Q21 NPI rose 1.0% y-o-y but fell 19.1% q-o-q on seasonality and lockdowns

• CDL Hospitality Trusts (SGX:J85)’s 1Q21 revenue and NPI grew marginally by 2.8% and 1.0% y-o-y to S$34.0m and S$19.8m, respectively, due to better performances from New Zealand and Maldives. However, NPI fell 19.1% q-o-q in 1Q21 due to seasonality effect and lockdowns in certain markets.

Government contracts on isolation business extended to 2Q21 for Singapore hotels

• For Singapore (excluding W Hotel), RevPAR fell 39.4% y-o-y in 1Q21, largely due to lower room rates (-54.9% y-o-y) while occupancy rose 18.7 ppt y-o-y to 73.1%. On a q-o-q basis, RevPAR was down 16.7% q-o-q, weighed down by weaker staycation demand in 1Q21 after the year-end festive season and school holiday in 4Q20. Including W Hotel, RevPAR would have fallen by 34.3% y-o-y and 24.7% q-o-q.
• Four out of CDL Hospitality Trusts’s six Singapore hotels were blocked booked by the government for isolation business which is expected to continue till end of 2Q21 and could potentially be extended beyond June.

RevPAR for New Zealand and Maldives grew 5.4% and 64.1% y-o-y respectively

• CDL Hospitality Trusts’s RevPAR performance in 1Q21 remained weak, with the exception of its hotels in New Zealand and Maldives which reported positive RevPAR of 5.4% and 64.1% y-o-y, respectively, helped by the government’s isolation business in New Zealand and strong pent-up demand in Maldives as its border reopened.
• The two hotels in Australia were essentially on fixed rent structure but will be exposed to trading conditions once leases expire on 30 Apr 2021 due to the absent of fixed rent.
• 1Q21 RevPAR for CDL Hospitality Trusts’s remaining overseas markets fell from 54.2%-87.6% y-o-y.
• Factoring in the latest developments, we revise our DPU forecasts for CDL Hospitality Trusts down by 5% for FY21 and FY22 and after fine-tuning our projections and estimates, our fair value estimate for CDL Hospitality Trusts decreases from S$1.40 to S$1.38. BUY.
• See
  • CDL Hospitality Trusts's Share Price,
  • CDL Hospitality Trusts's Target Price,
  • CDL Hospitality Trusts's Analyst Reports,
  • CDL Hospitality Trusts's Dividend History,
  • CDL Hospitality Trusts's Announcements,
  • CDL Hospitality Trusts's Latest News.

Chu Peng OCBC Investment Research | https://www.iocbc.com/ 2021-05-03

SGX Stock Analyst Report BUY UPGRADE HOLD 1.38 DOWN 1.400