- We reiterate our BUY recommendation on Far East Hospitality Trust (SGX:Q5T) with an unchanged DDM-based target price of S$0.79 and FY24e- 25e DPU forecasts of S$4.35 to S$4.45 cents. Far East Hospitality Trust's share price is currently trading at FY24e dividend yields of 6.8% and 0.7x P/NAV.
- - Read this at SGinvestors.io -
- DPU exceeded our expectation by 7%, surging to 4.09 cents (+25.1% y-o-y), supported by a higher NPI (+27.7% y-o-y) and S$8mil distribution of divestment gain of Central Square.
- - Read this at SGinvestors.io -
The Positives
Recovery on track.
- ADR exceeded pre-COVID levels, reaching S$170 for FY23, propelled by the recovery in flight capacity. However, RevPAR lags behind, standing at 95% of pre-COVID levels owing to a 9% gap in occupancy rates (FY19: 89.1% vs FY23: 80.1%).
- We expect RevPAR to continue trending upward in FY24, with more support from Q2 onwards due to seasonality. Income from variable rental surged by more than six times, surpassing pre-COVID levels by 1% and contributing to 25% of gross revenue amidst the leisure recovery. We expect a decline in contributions from corporate travelers, potentially driving ADR higher in the absence of corporate discounts.
- Occupancy is forecast to ramp-up in FY24e, thanks to major events such as the Taylor Swift Eras Tour and Singapore Airshow in 2024; current forward bookings appear promising.
Potential inorganic growth.
- Read more at SGinvestors.io.
Above is the excerpt from report by Phillip Securities Research.
Clients of Phillip Capital may be the first to access the full report in PDF @ https://www.stocksbnb.com/.
Liu Miao Miao Phillip Securities Research | https://www.stocksbnb.com/ 2024-02-15
Read also Phillip's most recent report:
2024-07-31 Far East Hospitality Trust - RevPAR Continues Trending Up Despite Muted ADR Growth.
Previous report by Phillip:
2024-05-02 Far East Hospitality Trust - Higher RevPAR By Ramping Up Occupancy.
Price targets by 2 other brokers at Far East Hospitality Trust Target Prices.
Listing of research reports at Far East Hospitality Trust Analyst Reports.
Relevant links:
Far East Hospitality Trust Share Price History,
Far East Hospitality Trust Announcements,
Far East Hospitality Trust Dividends & Corporate Actions,
Far East Hospitality Trust News Articles