CDL Hospitality Trust's (CDLHT) 2Q16 results were within expectations. 2Q16 DPU fell 0.9% to 2.23 S cents, coming up to 21.8% of our fullyear forecast. In comparison, 2Q15 DPU contributed 22.3% of FY15 DPU. 1H16 DPU currently makes up 43.6% of our full-year forecast. In comparison, 1H15 DPU contributed 46.6% of FY15 DPU.

Gross revenue increased 8.9% YoY to S$42.5m, coming up to 22.3% of our full-year forecast. 2Q16 NPI dropped 0.9% YoY to S$31.3m on the back of soft trading conditions in Singapore and the Maldives markets, as well as lower contribution from New Zealand and Australia markets due to local currency weakness. 2Q16 distributable income after retention and capital distribution fell 0.3% YoY to S$22.1m.

Against yesterday's price of S$1.47, CDLHT is currently trading at a blended FY16/17 forecasted yield of 7.0%. We place our HOLD rating and fair value of S$1.38 under review, pending more information from the briefing later.

Source: OCBC Research - 29 Jul 2016