Stock Name: CDL HTrust
Company Name: CDL HOSPITALITY TRUSTS
Research House: Phillip Securities
Phillip Securities Research in a May 20 research report says: "CDL HT made a comeback to Singapore hospitality property sector by acquiring Studio M Hotel from its sponsor to ride on the tourism wave.
"Post acquisition, the gearing ratio remains at a healthy level of 26.9% and a debt headroom of $400 million for inorganic growth based on 40% total debt-asset leverage ratio. Our DDM model has priced in the property tax revision from 2011 onwards for Singapore hotel properties, lower RevPAR for Orchard Hotel and Novotel Clarke Quay due to refurbishment as well as revenue contribution from Studio M Hotel.
"We are still positive on the tourism sector for this year but the aforesaid downside risks and pipeline supply coming on stream in the next few years will keep a lid on rental growth. To account for the downside risks, we raise the cost of equity from 6.3 to 7.6% and derive the target price of $2.04. DOWNGRADE TO HOLD."
Company Name: CDL HOSPITALITY TRUSTS
Research House: Phillip Securities
Phillip Securities Research in a May 20 research report says: "CDL HT made a comeback to Singapore hospitality property sector by acquiring Studio M Hotel from its sponsor to ride on the tourism wave.
"Post acquisition, the gearing ratio remains at a healthy level of 26.9% and a debt headroom of $400 million for inorganic growth based on 40% total debt-asset leverage ratio. Our DDM model has priced in the property tax revision from 2011 onwards for Singapore hotel properties, lower RevPAR for Orchard Hotel and Novotel Clarke Quay due to refurbishment as well as revenue contribution from Studio M Hotel.
"We are still positive on the tourism sector for this year but the aforesaid downside risks and pipeline supply coming on stream in the next few years will keep a lid on rental growth. To account for the downside risks, we raise the cost of equity from 6.3 to 7.6% and derive the target price of $2.04. DOWNGRADE TO HOLD."
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