LHN Limited - Maybank Research 2024-03-08: Boost From 2 MOH Contracts; Growing Its Portfolio

• We attended LHN (SGX:41O)’s briefing yesterday following the release of its 1Q24 business update on 26 Feb 2024. Total number of keys grew by 89 to 2,153 in 1Q24, while two Ministry of Health (MOH) contract wins in Jan 2024 will add at least 350 rooms to its portfolio.

Strong occupancies for its co-living assets

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• Co-living room rates are holding up despite a slower local rental market, with hotels benefitting from the surge pricing during major events and serviced residences lending stability.
• LHN has secured MOH contracts to operate two lodging facilities for 700 nursing professionals. The two contracts will add at least 350 keys to the portfolio. Both leases are likely to commence in 2H24 upon renovation.

Other segments are actively expanding

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• We also see incremental increase from the carpark service segment, with 2 projects (over 800 lots) added to its Hong Kong business.
• Additionally, LHN secured 24 new facility management contracts. Management sees stable performance for the industrial and commercial segments.
• Building on its renewable energy portfolio, its energy subsidiary recently won seven new solar energy contracts with 1.7-megawatt combined capacity.

Expect capital recycling to continue in 2024

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Li Jialin Maybank Research | Eric Ong Maybank Research | https://www.maybank-ke.com.sg/ 2024-03-08 SGinvestors.io

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