CapitaLand Ascott Trust - OCBC Investment 2023-10-31: Jet Set

• CapitaLand Ascott Trust (SGX:HMN) reported another set of robust results at its 3Q23 business update, as gross profit for the period grew 13% y-o-y to reach 103% of 3Q19 pro forma levels.

The wanderlust continues

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• Notwithstanding the fact that 3Q23 growth has moderated from 1Q23 and 2Q23 levels on the back of higher base effects, CapitaLand Ascott Trust's 9M23 gross profit posted a decent 23% y-o-y growth, as increase in revenue more than offset higher operating and financing costs.

Further positive momentum likely to be driven by occupancy

• In 3Q23, CapitaLand Ascott Trust’s portfolio revenue per available unit (RevPAU) grew 17% y-o-y and 3% q-o-q to S$154, reaching 102% of pre-COVID 3Q19 pro forma levels.
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  • Performance in China and Vietnam continued demonstrate positive q-o-q recovery momentum, with same-store RevPAU at 80% and 84% of 3Q19 levels respectively (2Q23: 78% and 83% of 2Q19 levels respectively).
• Strong RevPAU performance thus far continues to be underpinned by average daily room rates (ADR).
• Management has guided that positive RevPAU performance going forward is likely to be driven by improvements in portfolio occupancy, which stood at 77% in 3Q23 (2Q23: 75%) versus ~85% pre-COVID. There could also be some positive improvements in ADR for properties undergoing rebranding or asset enhancement initiatives (AEIs).

Credit metrics remain healthy

• Read more at SGinvestors.io.

Ada Lim OCBC Investment Research | https://www.iocbc.com/ 2023-10-31 SGinvestors.io

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