OUEHT

OUEHT: OCBC expects OUEHT to benefit from a seasonally higher hospitality demand in 2H14. A check on the preliminary hotel statistics published by Singapore Tourism Board painted an improved hospitality outlook in Jul – RevPAR grew by 5.4% m/m to S$223.4, while average occupancy rate increased to 90% from 84.9% in Jun. OCBC also notes that the number of tourist arrivals from Asia registered a 16.7% m/m increase in Jul. Given that Asia formed ~74% of OUEHT’s Mandarin Orchard Singapore (MOS) customer profile for 1H14, OCBC believes that OUEHT is likely to put on a better showing in 2H should the demand be sustained. On the valuation front, however, OCBC believes OUEHT is fairly priced at current level, and maintains HOLD rating and $0.85 TP on OUEHT.