Ascendas Hospitality Trust

Ascendas Hospitality Trust: 3QFY14 results in line with HSBC estimates. DPU was 1.61¢ (+3.9% y/y), while distributable income jumped 33.2% to $16.6m. NPI rose 36.9%to $23.4m while gross revenue rose 10% $56.6m, from better performance of Australia portfolio, full-quarter contribution from Ibis Beijing Sanyuan, and new income from Park Hotel Clarke Quay (acquired Jun last year). This was offset by adverse currency movements and dilutive impact from the preferential share offering in June 2013. Australian RevPAR was A$147 (+12% y/y), largely attributable to completed AEIs at 6/7 Australian hotels plus organic RevPAR improvements across the sector (2-5% y/y). HSBC guided that the $300m debt refinancing in the quarter will increase average cost of debt (~3%), but still views it a positive as currency risk is mitigated (75% in local currency, +25 ppt q/q) and average debt tenor prolonged (3.7 years vs 2.2 years in2Q). NAV at end Dec was $0.73. HSBC maintains an Neutral rating with TP cut to $0.75 (from $0.82), citing a rebound in Australian hotel performance as rerating catalyst.