CapitaLand Ascott Trust - UOB Kay Hian 2023-10-31: Broad-based Recovery In 3Q23 Across Key Markets

• Portfolio RevPAU grew 17% y-o-y and 3% q-o-q to S$154 in 3Q23, which is 2% above pre-pandemic levels. CapitaLand Ascott Trust's key markets in Japan (+198% y-o-y), Australia (+18% y-o-y) and the US (+12% y-o-y) registered the strongest sequential growth in RevPAU on a same-store basis.
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• CapitaLand Ascott Trust provides 2024 distribution yield of 6.7%. Maintain BUY. Target price: S$1.25.

CapitaLand Ascott Trust (CLAS)'s 3Q23 business update

• CapitaLand Ascott Trust (SGX:HMN) provided its 3Q23 business update, which is in line with our expectation.

Broad-based recovery.

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• Key markets in Japan (+198% y-o-y), Australia (+18% y-o-y) and the US (+12% y-o-y) registered the strongest sequential growth in RevPAU on a same-store basis, which exceeded pre-pandemic levels by 17%, 13% and 10% respectively.
• RevPAU for Singapore and the UK was also above pre-pandemic levels by 26% and 10% y-o-y respectively. Portfolio occupancy improved by 2ppt q-o-q to 77%.
• On a constant currency basis, RevPAU expanded by 9-22% y-o-y with the exception of Japan, which tripled y-o-y on the successful reopening to international leisure travel.
• Gross profit increased 13% y-o-y in 3Q23, which is slower than growth of 31% y-o-y in 1H23, due to a higher base with a steep recovery in 3Q22.

Japan: Boost from international leisure demand.

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Jonathan KOH CFA UOB Kay Hian Research | https://research.uobkayhian.com/ 2023-10-31 SGinvestors.io

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