Monday, September 9, 2013

OUE Hospitality Trust: Maiden of Orchard (DBSV)

OUE Hospitality Trust:
Maiden of Orchard
NOT RATED; S$0.88;
Potential Target * : 12-Month S$ 0.93  (8% upside)

• Premier address along Orchard Road
•Resilient earnings with multiple growth drivers
•Fair value of S$0.93 offers 8% upside

The Business
Premier address along Orchard Road.  OUE HT is a Singapore-based REIT with an initial portfolio of two properties in prime locations - the 1051-room Mandarin Orchard Hotel, and the accompanying Mandarin Gallery retail mall. The properties are collectively worth S$1.7bn as of 31 Mar13.


Resilient earnings structure with strong visibility.  OUE HT derives its rental income through a 15-year master lease structure which comprises of a fixed and variable income component pegged to the underlying performance of Orchard Hotel, while the Mandarin Gallery continues to enjoy robust occupancies of close to 100%. We estimate that close to 66% of its income is backed by fixed rents, which is one of the highest among the Hospitality S-REITs.

Multiple growth drivers. Immediate earnings drivers will come from the Manager optimizing the performance of Mandarin Orchard through a push towards higher yielding segments like the corporate market, an additional 26 new hotel rooms and the phased refurbishment of close to 430 hotel rooms, which should lead to higher RevPAR growth in the medium term. In addition, there is a visible pipeline of acquisitions targets in Singapore and China, which when acquired could potentially double its current number of rooms.

The Stock
DCF based fair value of S$0.93.   We have a DCF-based fair value of S$0.93, based on a WACC of 6.9%, offering potential upside of 8%. Better than expected operational performance and or acquisitions is expected to be re-rating catalysts.  In addition, yields of 7.6%-8.0% are higher than S-REIT peers.
 
Volatile earnings, mitigated by higher fixed rents.  While earnings are sensitive to RevPAR changes, we expect earnings volatility to RevPAR changes to be limited given a high % of income pegged to fixed rates.



Source/Extract/Excerpts/来源/转贴/摘录: DBSV-Research,
Publish date: 09/09/13

No comments:

Post a Comment

Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)
“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock