Ascott

Ascott: 3Q12 results which was in-line with estimates. Rev at $77.4m, +6% yoy and -2% qoq and DPU at 2.24c, flat yoy and -5.9% qoq. Result brings 9M11 rev to 227.9m, +7% yoy and DPU at 6.76c, flat yoy. Rev increased was mainly due to the contribution from Citadines Shinjuku Tokyo and Citadines Karasuma-Gojo Kyoto. Stronger performance from Ascott Reit’s serviced residences in China and UK also contributed to the increase in rev and RevPAU. Going forward, expect earnings to further improve following the addition of three prime assets to its portfolio, namely Ascott Raffles Place SG, Ascott Guangzhou and Madison Hamburg. Grp will continue to focus on yield accretive acquisitions in countries where it operates and explore opportunities in Asia as well as London, Paris and key cities in Germany. At current price, grp trades at 7.0% yield and at 0.95x P/B. Balance sheet healthy with a gearing at 40.6%, well within the 60% guideline and interest coverage at 3.9x. Grp’s debt maturity age stands at 3.2yrs. Ratings as follow: CIMB maintains Neutral with $1.38 TP CLSA maintains O/p with $1.35 TP