Market Pulse: SG Hospitality Sector (18 Dec 2012)

Stock Name: AscottREIT
Company Name: ASCOTT RESIDENCE TRUST

Research House: OCBC

Price Call: BUY

Target Price: 1.37

Stock Name: GP Hotels
Company Name: GLOBAL PREMIUM HOTELS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 0.29

Stock Name: CDL HTrust
Company Name: CDL HOSPITALITY TRUSTS

Research House: OCBC

Price Call: HOLD

Target Price: 1.91

Stock Name: Far East HTrust
Company Name: FAR EAST HOSPITALITY TRUST

Research House: OCBC

Price Call: HOLD

Target Price: 1.02

Stock Name: Genting SP
Company Name: GENTING SINGAPORE PLC

Research House: OCBC

Price Call: HOLD

Target Price: 1.33

MARKET PULSE: SG Hospitality Sector

18 Dec 2012

KEY IDEA SG Hospitality Sector: Muted outlook for 1H13 While the hospitality industry had a good start to the year with 1Q12 RevPAR growth of 14%, the performance weakened dramatically in 2Q12 and 3Q12, and for the first 10 months of the year, RevPAR declined 3.3% YoY (preliminary statistics). While we remain optimistic about longer-term supply and demand dynamics of the hospitality industry through 2014, we think that a muted outlook for tourism in 1H13 will weigh on the price performance of hospitality counters in the coming months. Our channel checks indicate that hotel bookings up to Chinese New Year are still weak, and we believe that 2013 will see fewer MICE events. We are downgrading the hospitality sector from Overweight to NEUTRAL. Our top pick is Ascott Residence Trust [BUY, FV: S$1.37]. We also have a BUY rating on Global Premium Hotels [FV: S$0.29], and HOLD ratings on CDL Hospitality Trusts [FV: S$1.91], Far East Hospitality Trust [FV: S$1.02] and Genting Singapore[FV: S$1.33]. (Sarah Ong)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - US stocks rose on Mon, with financials leading the gains, buoyed by hopes of progress towards a deal to avoid the fiscal cliff as senior Republican John Boehner and President Obama met again for further discussions. The Dow ended 0.8% higher at 13,235.39, while the S&P 500 Index rose 1.2% to 1,430.36 and the Nasdaq finished 1.3% higher at 3,010.60. - Singapore home sales fell 44% MoM and 36% YoY in Nov to 1,087 units, the lowest level in 11 months, as developers slowed project sales ahead of the holiday season, data from the Urban Redevelopment Authority show. - Jackspeed Corp has sold a factory in Tampines with a floor area of 1,342 sq m for S$5.55m in cash as part of its plans to rationalise its resources. - Global Logistic Properties has signed two leases totalling 361k sq ft to Chinese e-commerce firm Vipshop - one in Jiangsu Province for 290k sq ft and another in Beijing for 70k sq ft.