SG: MARKET PULSE: CDL Hospitality Trusts (5 Dec 2013)

Stock Name: CDL HTrust
Company Name: CDL HOSPITALITY TRUSTS

Research House: OCBC

Price Call: BUY

Target Price: 1.84

MARKET PULSE: CDL Hospitality Trusts

5 Dec 2013

KEY IDEA CDL Hospitality Trusts: Proposed acquisition of Jumeirah Dhevanafushi CDL Hospitality Trusts (CDLHT) has entered into conditional land and business sale agreements with Xanadu Holdings Pvt Ltd for the acquisition of Jumeirah Dhevanafushi in the Maldives at US$59.6m (~S$74.8m). Based on the purchase price and assuming that CDLHT owned the property from 1 Jan 2013, the pro forma annualised net property income yield of the property for the nine months ended 30 Sep 2013 would be 6.2%. While management indicated that the 4Q13 and 1Q14 performance for its Singapore hotels is still lackluster, this is within our expectations. We roll over our DDM model to FY14 numbers. Despite using a more conservative risk free rate of 3.0% (instead of 2.4% previously), our FV increases from S$1.83 to S$1.84 and we maintain our BUY rating on CDLHT. (Sarah Ong)

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

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