Thursday, June 14, 2012

CDL Hospitality Trust

CDL Hospitality Trust: CIMB maintains O/p with $2.08 TP on back of strong tourism data in SG. (see above posting) Add that performance of upscale hotels was strong, with consistently high occupancy of 90% and above-peers ARR growth. REVPAR for mid-tier hotels was up 1% yoy, where ARR growth took up some slack from lower occupancy. On this basis, think CDLHT should perform well, with most of its hotels operating in these tiers. Overall, house We keep our DPU estimates, DDM target price (discount rate: 8.1%) and Outperform rating. See catalysts from higher-than-expected REVPAR and accretive debt-funded AEI and acquisitions, backed by balance-sheet strength and retained earnings.

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