Frasers Hospitality Trust - Maybank Research 2023-11-08: A Generally Upbeat 2H23; Maintain BUY

• Frasers Hospitality Trust (SGX:ACV) posted 2HFY23 revenue of S$61.0m (~-2% h-o-h/+18% y-o-y). FY23 DPU of S$0.024426 forms 101% of our FY23 forecast. FY23 revenue/NPI rose by ~44%/50% on a same-store basis, excluding Sofitel Sydney Wentworth that was divested in Apr 2022.
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• Looking ahead, while a strong event pipeline and recovery tailwinds are likely to support RevPAR, we expect growth from room rates and occupancy to gradually normalize.

RevPAR continues to grow in 2H23

• Frasers Hospitality Trust's Japan and UK assets showed the strongest revenue per available room (RevPAR) growth in 2H23 due to higher occupancy (+15ppt h-o-h), and ADR (+20% h-o-h), respectively.
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• There was a softer performance (-12% in ADR) in Australian assets, partially offset by largely resilient occupancy (+2ppt). This was led by tepid corporate and group demand in Melbourne, on top of new hotel openings of over 4,000 keys in the past 24 months.
• While Frasers Hospitality Trust’s occupancy in 2H23 rose 3-27ppt y-o-y across its portfolio, occupancy is still shy of pre-pandemic levels by 2- 15ppt. Overall, RevPAR in all markets is 2-12% ahead of 4Q19 levels.

Upcoming debt refinancing

• Read more at SGinvestors.io.

Li Jialin Maybank Research | https://www.maybank-ke.com.sg/ 2023-11-08 SGinvestors.io

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