Ascott Residence Trust

UOBKayhian on 7 Nov 2014

FY14F PE (x): 20.0
FY15F PE (x): 18.8

Results in line, expect stronger 4Q14. Ascott Residence Trust’s (ART) 3Q14 and 9M14
DPU of 2.11 cents and 6.04 cents came in in line at 25% and 72% of our full-year
forecasts respectively. We expect a stronger 4Q14 on the back of revenue contribution
from its newly-acquired properties.

Maintain BUY and target price of S$1.40. ART is well positioned to benefit from any
uptick in corporate travel pick-up in 2015 with the strategic acquisition of new serviced
residences. The stock is trading at an attractive 2015F yield of 7.3%, a 30bp higher than
peers’ average of 7%. Our valuation is based on a two-stage DDM model (required rate
of return: 8.1%; terminal growth rate: 2.0%).