buysellhold july.23

CGS CIMB

CGS CIMB

Gamuda

Largest Taiwan win; penetrating MRT space

 

■ Gamuda clinches the RM3.5bn Kaohsiung MRT package in Taiwan.

■ An important win: i) largest win in Taiwan, penetrating the MRT space with a main contractor role, and ii) brings it closer to its target of doubling orderbook.

■ Reiterate Add and SOP-based TP of RM5.65.

 

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Hospitals

Tailwinds from foreign patient traffic

 

■ We estimate aggregate hospital core net profit grew 11% yoy and 25% qoq in 3Q23F, with BH likely seeing the strongest earnings growth.

■ Given concerns over mounting geopolitical risks, we expect the healthcare sector to continue to perform well relative to other sectors.

■ We reiterate our Overweight call for the sector, with BH and PR9 as our top picks. 

 

 

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UOB KAYHIAN

UOB KAYHIAN

Far East Hospitality Trust (FEHT SP)

3Q23: Rising RevPAR And Profitability Driven By Surge In Visitor Arrivals

 

RevPAR increased 44% yoy and 14% qoq to S$131 for its nine hotels. All hotels contributed variable rent, which accounted for 31% of master lease rental in 9M23. The incentive fee of S$18m will be utilised to cushion the negative impact of higher interest rates. FEHT provides a 2024 distribution yield of 7.8%. Its P/NAV of 0.63x is unwarranted given its good corporate governance, strong sponsor and low aggregate leverage of 32.2%. Maintain BUY. Target price: S$0.76. 

 

 

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STRATEGY – HONG KONG

Takeaways From Hong Kong 2023 Policy Address

 

We have a neutral view on the policies related to the stock market and we expect a short-term rebound in ADT but sustained recovery will still depend on China’s macro development and US monetary policy. For the property sector, the relaxation of demandside management measures is within expectation. However, combing the aggressive land supply plan and weak population policy, the overall impact on the property industry is natural to negative. Sales need to be closely watched.

 

 

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CGS CIMB MAYBANK KIM ENG
Far East Hospitality Trust Hotel
RevPAR still in recovery
 
■ 9M23 distributable income of S$69.3m (+36.7% yoy) was in line at 78.6% of our FY23F estimate. All properties performed above fixed rent levels.
 
■ 3Q hotel/serviced residence (SR) revenue per available room (RevPAR) came in at 99%/122% of 3Q19 levels on higher room rates.
 
■ Reiterate Add on FEHT as a hospitality recovery and re-rating play. 
 
 
 
 
 
 

Far East Hospitality Trust (FEHT SP)

Riding the tailwinds

 

Robust 9M23 performance FEHT’s 3Q23 distributable income (DI) of SGD22.9m rose 19.3% QoQ and +51% YoY. 9M23 DI of SGD60.3m grew 36.7% YoY and was 80.5% of our fullyear forecast. Growth was underpinned by continued recovery of RevPAR for hotels and service residences (SRs), and distribution of divestment gains. Cost of debt held steady, helped by a lower hedge ratio. We raise our FY23 DPU forecast by 6% by factoring in better performance but lower our DDM-based TP to SGD0.75 (-6%) due to a higher discount rate. Maintain BUY on distribution stability and the sector’s growth outlook. 

 

 

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