CapitaLand Ascott Trust - Maybank Research 2024-01-29: Balancing Growth & Stability

• CapitaLand Ascott Trust (SGX:HMN) reported 2H DPU of S$3.8cts, +14% y-o-y. Full year DPU was 6.57cts, +16% y-o-y, 11%/14% ahead of our/cons est. Adj. for realized FX gains, 2H DPU of S$3.0cts. was flat y-o-y while FY DPU was +14% y-o-y.

Improved operations; boost from one-off gains

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• Factoring in recent acquisition, share placement and a lower discount rate, our estimates for CapitaLand Ascott Trust are relatively unchanged while our DDM-based CapitaLand Ascott Trust's target price goes up by 10% to S$1.10.

Room rates support RevPAU growth

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• 2H23 RevPAU of S$157 rose 10% y-o-y while FY23 full year RevPAU of S$148 rose 23.3% y-o-y. Specifically, 4Q23 RevPAU of S$161 rose 4% q-o-q/ y-o-y and is 3% above pre-pandemic level on a same-store basis.
• Growth in RevPAU was led by room rates while average occupancy was stable q-o-q at 77% for 4Q23 and is 8% below pre-pandemic level.
• Barring China and Vietnam, key markets of Australia, Japan, Singapore, UK and the US continued to report RevPAU above pre-pandemic level notwithstanding some slowdown in Singapore and Australian market. While China and Vietnam grew q-o-q, RevPAU remains ~12-14% below pre-pandemic levels.

Prudent capital management; focus on recycling

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Krishna Guha Maybank Research | https://www.maybank-ke.com.sg/ 2024-01-29 SGinvestors.io

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