CDL Hospitality Trusts' (CDLHT) results were in line with expectations. 3Q17 revenue increased 20.7% YoY to S$54.8m and NPI increased 15.9% to S$40.4m. The increase was mainly due to the inorganic contribution from The Lowry Hotel in Manchester (acquired 4 May 2017) and the Pullman Hotel Munich (acquired 14 Jul 2017) as well as a 56.1% YoY growth in NPI from New Zealand.

3Q17 DPU dropped 3.0% YoY to 2.29 S cents or 25.3% of our initial full-year forecast of 9.0 S cents.

Singapore Hotel RevPAR dropped 1.4% YoY in 3Q17 though we note that Singapore NPI as a whole increased 2.3%, mainly due to the 33.3% increase in Claymore Connect’s NPI contributions. Softer trading performance was observed for the Japan Hotels and Maldives Resorts, and NPI contributions from Hilton Cambridge City Centre came in lower due to the weakened pound.

We place our Hold rating and fair value of S$1.525 under review pending further details from the briefing.

Source: OCBC Research - 27 Oct 2017