buysellhold july.23



Far East Hospitality Trust

Mega events to drive RevPAR recovery


 Gross revenue for FY23 rose by 27.8% YoY to S$106.8mn on the back of a rebound of hotel revenue of 36%. It was within our expectations. ADR increased by 36.1% YoY to S$170 thanks to rising international visitor arrivals to 71% of pre-COVID level. Occupancy grew 6.3 pp YoY to 80.1%, leading to a 47.8% rise in RevPAR to S$136.



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Far East Hospitality Trust

Looking for acquisitions in FY24F


■ Management signalled intent to acquire in FY24F – likely in Japan/Singapore.

■ Higher hotel & retail occupancy to drive FY24F earnings growth, in our view.

■ Reiterate Add on geographical diversification as a re-rating catalyst.



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Thai Beverage

Beer sales disappointed


■ 1QFY9/24 revenue (-6% yoy) disappointed due to a weaker beer segment (-14% yoy). 1Q group EBITDAwas +2% yoy on prudent cost management.

■ Weak beer sales in 1Q suggest volume deterioration in TH while VN also remained weak; spirits sales resilient with ASP hike offsetting lower volumes.

■ Downgrade to Hold. Valuations are undemanding, but we see risks for beer business with slow VN recovery and competitive threat from a new entrant.



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Civmec (CVL SP)

1HFY24: Results In Line; Positive Dividend Surprise And Robust Net Cash Position


Civmec’s 1HFY24 net profit of A$32m (+13% yoy) is in line with our expectation, making up 51% of our full-year estimate. Civmec proposed a 25% higher interim dividend of 2.5 A cents for 1HFY24, driven by strong operating cash flow of A$111.2m (+32% yoy). Its net cash position surged to A$83m (+549% yoy). Civmec remains positive on its future outlook given the robust orderbook and strong tendering opportunities across all the sectors in which it operates. Maintain BUY and target price of S$1.23. 



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Far East Hospitality Trust (FEHT SP)

2H23: Fastest Growth With Lowest Risk


FEHT will benefit from the recovery of MICE events and strong line-up of concerts at the National Stadium due to its single-minded focus on Singapore. The incentive fee of S$18m from the divestment of Central Square could be utilised to cushion the negative impact of higher interest rates. FEHT provides 2024 distribution yield of 6.4%. Its low P/NAV of 0.71x is unwarranted given good corporate governance, strong sponsor and low aggregate leverage of 31.3%. Maintain BUY. Target price: S$0.82. 



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Thai Beverage (THBEV SP)

1QFY24: In Line As Margins Improve


THBEV released its 1QFY24 business update whereby overall revenue fell 5.9% yoy, dragged by the beer segment. However, 1QFY24 EBITDA increased 1.9% yoy on more efficient A&P spending along with lower raw material costs. The spirits segment continues to benefit from a better product mix while the beer segment faces a weak macroeconomic outlook. In our view, THVBEV is trading at an attractive -2SD to its mean PE. Maintain BUY with the same SOTP-based target price of S$0.70. 



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