- Upgrade Frasers Hospitality Trust (SGX:ACV) to BUY from HOLD due to improved sector outlook and strong results. Lowering DDM-based target price to S$0.54 (COE: 7%, LTG: 3%) due to inflation and rising interest rates.
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- Frasers Hospitality Trust’s current P/B of 0.67x is around -1 standard deviation level. The revised target price of S$0.54 implies a target P/B of 0.8x (historical mean since 2019).
Strong recovery underpins FY22 results
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- Singapore market saw ~50%/63% jump y-o-y in full-year gross operating revenue (GOR) and gross operating profit (GOP), respectively, led by strong recovery in hotel performance.
- Robust rebound in GOR was also seen in Malaysia (>100% y-o-y), the UK (>100% y-o-y) and Germany (~82% y-o-y), underpinned by strong performance in 2H22.
Japan market ready to catch up
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