CDL Hospitality Trusts (CDLHT) reported its 2Q15 results which came in below our expectations. Although gross revenue rose 3.0% YoY to S$39.0m, it was a decline of 7.6% on a QoQ basis. DPU fared worse, declining 10% YoY and 7.8% QoQ to 2.25 S cents. CDLHT’s performance was impacted by a weak tourism scene, as its Singapore hotels’ RevPAR dipped 4.4% YoY to S$173 due to a fall in average daily rate by 5.2% to S$200. Occupancy was stable at 86.5% (+0.4 ppt).

For 1H15, CDLHT’s gross revenue slipped marginally by 0.5% to S$81.2m and contributed 46.1% of our FY15 forecast. DPU slipped 10.8% to 4.69 S cents and this made up 43.0% of our full-year projection. We will provide more details after the analyst briefing. For now, we have a HOLD rating and S$1.76 fair value estimate on the stock.

Source: OCBC Research - 29 Jul 2015