Global Premium Hotels (GPH)

Global Premium Hotels (GPH): good set of 1Q12 results. Revenue increased by 28.8% yoy to $14.9m, mainly due to the three new hotels launched in 2011 – Parc Sovereign Hotel, Fragrance Hotel-Riverside and Fragrance Hotel Elegance. Likewise, the gross profit increased by 26.7% yoy to $13m. Net profit grew 46.9% yoy to $6.4m, boosted by lower effective tax rate. Qoq performance was decent as well, with revenue +5.7% qoq and ent profit +19.8% qoq. GPH’s average occupancy rate (“AOR”) in 1Q12 improved 15.7% pts to 91.7%, with new hotels achieving occupancy of 89 - 98%. Tapping on its IPO funds, the Group will seek suitable sites for hotel development and aim to add another 200 to 300 rooms to economy- or mid-tier hotels within 1 to 2 years. Mgt notes outlook for the hotel industry remained positive, supported by 14.6% growth in 1Q12 visitor arrivals to Singapore. But notes the uncertain global economy and expected addition of ~2000 new hotel rooms in Spore in 2012 are likely to increase the competitiveness of the Spore hospitality mkt. Nevertheless, mgt believes its economy and mid-tier hotels will continue to show resilience. The stock trades at 0.86x P/B, 10.2x annualized 1Q12 P/E (assuming share base of 1b shares).