CDL Hospitailit Trust

CDL Hospitailit Trust: Reported 4Q10 & FY10 Results which were slightly ahead of expectations. 4Q10 DPU came in at 2.78c, +9%qoq, helped partly by the lower retained income vs last qtr and better operating performance. FY10 DPU of 10.2c, was marginally ahead of consensus estimate of 10c and +19%YoY…..

In terms of gross revenue, SG hotels managed to post YoY increases of 13% to18%, led by M Hotel, compared to 15% to 36%YoY increases last qtr. 4Q10 RevPar of $194, +21%YoY, while occupancy was flat at 90%, compared to 89%YoY. Management note that RevPar still below peak of 2008 at $207, despite occupancies hovering close to 90%, largely due to higher weekend
Occupancies which command lower rates compared to weekdays….

Going forward, REIT plans to continue organic growth through upgrading of rooms at Grand Copthorne Waterfront, Orchard Hotel and Novotel Clarke Quay. Of these, REIT will only need to provide capex for Novotel, while the other two will be borne by the operators.We note that at currnet levels, REIT trades at 1.1x FY11E P/B, while Net Gearing remains strong with Net gearing at a low 14%....

Citi (only house with Sell Call so far) expect slower RevPar, as RevPar has posted strong double-digit growth in 2010, partly due to the low base effect from 2009. However, still assuming RevPar growth of 15% in 2011E and 10% in 2012E, which would have surpassed the 2008 peak. House maintain Sell Call with $1.70 TP, believing that expectations for the stock are high at the moment and surprises could be to the downside….

Among other broker ratings on CDL Hospitality Trust, JP Morgan retain Overweight with $2.35 TP, Daiwa maintain OutPerform with $2.30 TP, Macquarie maintain Neutral with $2.05 TP, CS maintain OutPerform with $2.53TP, Morgan Stanley maintain Neutral with $2.03 TP and UBS maintain Buy with $2.40 TP.