Global Premium Hotels’ (GPH) 1Q16 results were below expectations. Revenue dropped 1.4% YoY to S$14.5m, making up 21.7% of our full-year forecast. The decrease was mainly due to lower room revenue recognized, but partially offset by greater contribution from three hotels post asset enhancement initiatives which were completed in 2015.

Net profit gained 4.4% to reach S$3.4m, but only made up 17.2% of our full-year forecast. Occupancy dropped 3.5 ppt to 76.0% this quarter, contributing to a 3.8% YoY fall in REVPAR to S$79.4m. As we will be fine-tuning our model, we put our Hold rating and fair value of S$0.33 under review.

Source: OCBC Research - 6 May 2016