Friday, October 29, 2010

CDL Hospitality Trust

CDL Hospitality Trust: Posted strong set of results above estimates, with Rev at $31.6m, up 38.4%YoY and 3%QoQ, while Distribution Income at $24.2m was up 42.8%YoY and 10%QoQ. Strong performance attributed to grp’s highest ever quarterly occupancy rate of 91.6%, since its IPO, boosted by growth momentum from record visitor arrivals to SG and increasing hotel rates.....

Results places 9mth10 DPU at 8.26c, translating to a yield of 5.1%, up 27.5%YoY and on track to beat consensus estimates for FY10 DPU of 10.3c. Going forward, grp remains upbeat on SG’s hospitality sector, expecting ongoing draw of IRs and strong asian economy increase tourist arrivals and will capitalize on opportunities to maximize yield and carry out strategic acquisitions...

We note that grp’s balance sheet remain strong with gearting ration at 21.1%, with interest coverage at 7.8x. At current price, grp trades at 1.47x P/B, with an annualized yield of 5.1%, vs peers Ascott Residential Trust of 0.87x and yield of 6.34%.

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