UOBKayhian on 2 Feb 2015
FY15F PE (x): 20.2
FY16F PE (x): 18.9
Results above expectations. Frasers Hospitality Trust (FHT) reported DPU of 2.97 S
cents for the period 14 Jul – 31 Dec 2014. Net property income (NPI) for the period
came in at S$41.8m, exceeding the company’s expectations at IPO by 2.3%.
Distributable income also outperformed by 5.3% during a seasonally stronger quarter,
attributable to its refurbished assets in the UK, as well as properties in Singapore,
Sydney and Kobe. The results are better than expectations mainly due to lower-thanexpected
owner’s expenses and interest costs as well as better-than-expected
contribution from UK and Japan.
Maintain BUY with a slightly higher target price S$1.02 (from S$1.00). Our valuation is
based on a two-stage DDM model (required rate of return: 8.1%; terminal growth rate:
2.0%). We expect a strong 2016 on the back of contributions from newly renovated
assets and stable growth from its existing properties. The stock is offering attractive
FY15F yield of 7%.
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