Far East Hospitality Trust (FEHT) reported its 3Q15 results this morning which met our expectations. Operational performance remained muted, as gross revenue fell 4.8% YoY to S$29.7m, while DPU slipped 9.1% to 1.20 S cents. However, the latter was an improvement of 3.4% on a QoQ basis. RevPAR and RevPAU for its Hotels and Serviced Residences segments remained weak, declining 5.6% and 9.2% YoY to S$151 and S$209, respectively.

For 9M15, FEHT’s gross revenue was lower by 6.2% at S$85.8m, and this formed 72.4% of our FY15 forecast. DPU of 3.43 S cents represented a dip of 11.1%, and constituted 73.8% of our full-year projection. We will provide more details after the analyst conference call, but will likely maintain our HOLD rating and S$0.67 fair value estimate on the stock.

Source: OCBC Research - 3 Nov 2015