Stock Name: CDL HTrust
Company Name: CDL HOSPITALITY TRUSTS
Research House: DBS Vickers
DBS Vickers Securities in an April 13 research report says: "CDL Hospitality Trust's ("CDL HT") proposed acquisition of 360-room Studio M hotel, at $154 million ($428k/key) is attractive in our view.
"The initial yield of 6.1% has more upside as channel checks revealed that Studio M's rate has moved up c15% to $200 per night in recent months (from $174 per night in 2010) and we see further upside in 2011 given its strong occupancy levels. With 82% of earnings derived from its Singapore hotels, we forecast CDL HT to deliver a strong 13% organic earnings growth for FY2011-2012, more than S-REIT peers.
"The group's strong DPU growth profile is attractive plus low gearing of c26% post acquisition, which remains below management's optimal level of c40%. Hence, the additional debt-funded acquisition headroom may be utilized for opportunistic ventures. Target price of $2.30. MAINTAIN BUY."
Company Name: CDL HOSPITALITY TRUSTS
Research House: DBS Vickers
DBS Vickers Securities in an April 13 research report says: "CDL Hospitality Trust's ("CDL HT") proposed acquisition of 360-room Studio M hotel, at $154 million ($428k/key) is attractive in our view.
"The initial yield of 6.1% has more upside as channel checks revealed that Studio M's rate has moved up c15% to $200 per night in recent months (from $174 per night in 2010) and we see further upside in 2011 given its strong occupancy levels. With 82% of earnings derived from its Singapore hotels, we forecast CDL HT to deliver a strong 13% organic earnings growth for FY2011-2012, more than S-REIT peers.
"The group's strong DPU growth profile is attractive plus low gearing of c26% post acquisition, which remains below management's optimal level of c40%. Hence, the additional debt-funded acquisition headroom may be utilized for opportunistic ventures. Target price of $2.30. MAINTAIN BUY."
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